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U.S. stock futures saw modest gains on Thursday as investors weighed the implications of a trade agreement with Vietnam, alongside anticipation of the monthly jobs report. The cautious optimism surrounding the trade deal and upcoming economic data kept sentiment in check ahead of the July 4 Independence Day holiday.
Stock Market Overview
As of 05:30 ET (09:30 GMT), Dow Jones Futures rose by 16 points (0.1%), S&P 500 Futures gained 4 points (0.1%), and Nasdaq 100 Futures climbed 23 points (0.1%). On Wednesday, the S&P 500 and the tech-heavy NASDAQ Composite both set fresh record highs, continuing their upward momentum. Meanwhile, the Dow Jones Industrial Average finished mostly unchanged, though it remained close to its all-time peak.
With a shortened trading session Thursday ahead of the July 4 holiday, market participants are primarily focused on the upcoming jobs report, which could provide important insights into the health of the U.S. labor market and influence future Federal Reserve policy decisions.
Nonfarm Payrolls in Focus
The highlight of the day will be the release of the monthly nonfarm payrolls report, a critical indicator of employment conditions in the U.S. Economists expect the Bureau of Labor Statistics’ June report to show an addition of 110,000 jobs, a decrease from May’s 139,000. The unemployment rate is anticipated to rise slightly to 4.3% from 4.2%.
Although the ADP National Employment Report released earlier this week showed slower hiring amid trade uncertainty, there has often been little correlation between the ADP and Bureau of Labor Statistics numbers. Fed policymakers will be particularly attentive to the data, as they are tasked with maintaining maximum employment, all while navigating potential impacts from President Trump’s tariff agenda.
Federal Reserve’s Interest Rate Outlook
Federal Reserve Chair Jerome Powell has maintained a cautious approach to future interest rate changes, despite increasing pressure from President Trump for more aggressive rate cuts. However, Powell acknowledged this week that the central bank could consider lowering borrowing costs at any of its remaining four policy meetings this year, contingent on the economic outlook.
Trade Deals Boost Sentiment
The recent U.S.-Vietnam trade agreement has fueled optimism in markets, marking the third such agreement for the U.S. ahead of the July 9 deadline, when reciprocal tariffs are set to return. The deal imposes a 20% tariff on most Vietnamese imports and a 40% tariff on goods rerouted through the country. This deal follows last week’s U.S.-China agreement and Canada’s decision to pull back from its digital services tax, all contributing to growing hopes for more trade deals ahead of the July 9 deadline.
Further supporting market sentiment, the U.S. Commerce Department lifted restrictions on chip design technology exports to China as part of the recent trade agreement between Washington and Beijing. Investors are hopeful for more such agreements with other major economies, particularly India.
Progress on Trump’s Tax Bill
In addition to trade developments, markets are closely monitoring progress on President Trump’s tax-cut and spending bill. The U.S. House of Representatives advanced the legislation on Thursday, setting the stage for a potential vote later in the day. The bill, which Senate Republicans narrowly passed earlier in the week, is expected to add between $3.3 trillion and $3.4 trillion to the national debt over the next decade.
The nonpartisan Congressional Budget Office (CBO) has projected that the bill could lead to nearly 12 million Americans losing their health insurance, further complicating the political debate around the legislation.
As investors digest the implications of both the jobs report and ongoing fiscal and trade developments, stock futures remain tentative, with a focus on upcoming economic data and potential shifts in U.S. policy.
