Bond Yields Surge as It Becomes Crystal Clear the Fed Won’t Cut Rates Until September
- Why Did Stocks Ignite Despite the Fed’s Hawkish Shift?
- How Are Trump’s Trade and Tax Moves Shaking Things Up?
- Which Stocks Are Breaking Records?
- What’s Next for Markets Post-July 4?
- FAQs
The S&P 500 and NASDAQ smashed record highs on Thursday after unexpectedly strong U.S. jobs data flipped the script on Wall Street’s rate-cut bets. With 147K jobs added in June—blowing past forecasts—traders are now pricing in near-zero odds of a July Fed cut. Bond yields spiked, stocks rallied, and even smaller caps joined the party as the Russell 2000 turned positive for 2024. Meanwhile, Trump’s tax bill advances, and markets brace for tariff headlines post-Independence Day. ---
Why Did Stocks Ignite Despite the Fed’s Hawkish Shift?
The market’s resilience was downright shocking. Just a day after ADP’s gloomy private payrolls report hinted at labor market cracks, the Bureau of Labor Statistics dropped a bombshell: 147,000 non-farm jobs added in June (vs. 110K expected). The Dow jumped 381 points, the S&P 500 gained 0.8%, and the Nasdaq climbed 1%—all hitting fresh peaks. Even the unemployment rate dipped to 4.1%, defying expectations of a rise to 4.3%. This wasn’t just a "good" report—it was a "stop-the-presses, burn-your-shorts" stunner. As one BTCC analyst quipped, "The economy’s flexing like it’s on Wall Street steroids." Traders scrambled to dump rate-cut bets, sending 10-year Treasury yields soaring 12 basis points. CME’s FedWatch now shows a 95% chance rates stay put in July.: Check TradingView’s yield curve charts—the steepening suggests the bond market’s finally buying into the "higher for longer" narrative.
---How Are Trump’s Trade and Tax Moves Shaking Things Up?
Politics added extra spice to the mix. With Trump’s 90-day tariff pause expiring next week, Wall Street’s on edge. His new Vietnam trade deal got nods, but everyone’s eyeing the calendar. "Tariff headlines could flip the script overnight," warned a Morgan Stanley desk note. Meanwhile, the GOP’s tax bill cleared the Senate and is now barreling toward a House vote. If passed, it could rewrite corporate tax rules by fall. "This isn’t just tweaking brackets—it’s a full-system reboot," noted a Goldman Sachs strategist.: American Express and JPMorgan hit all-time highs this week—proof that even dinosaurs can moonwalk in this market.
---Which Stocks Are Breaking Records?
The rally wasn’t just for the FAANG crowd. A whopping 36 S&P 500 stocks hit 52-week highs, with 25 etching all-time records: - Royal Caribbean : Highest since its 1993 IPO. - Capital One/Goldman Sachs : Shattering 1977 IPO levels. - Nvidia/Oracle : Tech bulls ain’t quitting. Even the Russell 2000’s 0.6% gain pushed it into green YTD—a 24% rebound since April. "Small caps are the market’s secret sauce right now," observed a BTCC trader.: CoinGlass shows short squeezes fueled 40% of these moves. Ouch, bears.
---What’s Next for Markets Post-July 4?
With early closes and thin liquidity, Thursday’s action was a trailer for Q3’s blockbuster. Key themes to watch: 1. Fed Speeches : Any dissent on rate holds? 2. Tariff Deadline : Will TRUMP escalate China/EU tensions? 3. Earnings : Banks kick off next week—guidance is critical. One thing’s clear: The "soft landing" camp is winning. As Ellerbroek put it, "This economy can take a few trade punches without KO’ing.": This article does not constitute investment advice.
---FAQs
Why did bond yields rise after the jobs report?
Strong jobs data reduced expectations of imminent Fed rate cuts, making existing bonds less attractive. Yields MOVE inversely to prices.
How many jobs were added in June 2024?
147,000 non-farm jobs—far above the 110K consensus estimate (Source: Bureau of Labor Statistics).
Did the Russell 2000 recover in 2024?
Yes! It’s up 24% since April’s lows and turned positive YTD on Thursday.
