EB Daily Market Report - Quick Update - Wednesday, July 2, 2025

We just wrapped up our Live Trading Room 30 minutes or so ago and I'm heading for an appointment. I just wanted to give you a quick update on Wednesday's action thus far.

First, the ADP employment report was released this morning and it showed -33,000 jobs for June, while also revising May's jobs lower from 37,000 to 29,000. This definitely paints a picture of a wobbling U.S. economy and comes on the heels of Fed Chair Powell's comments on Tuesday that the Fed would have lowered rates this year if not for the potential impact of tariffs. Despite the negative jobs report, however, the 10-year treasury yield ($TNX) is up 5 basis points to 4.30% as investors flee the bond market ahead of tomorrow's June nonfarm payrolls report.

Stock market action is bifurcated with slight weakness on the Dow Jones, while relative strength is seen for the 2nd straight day in the small cap Russell 2000 (IWM, +0.87%), an area of the market that should benefit from future rate cuts. Transports ($TRAN, +0.74%) is an economically-sensitive area that also would benefit from lower interest rates. The stock market seems to be rotating with upcoming rate cuts in mind.

4 sectors are higher today, while 7 are lower. However, key sectors like technology (XLK, +0.86%) and consumer discretionary (XLY, +0.68%) are among those gaining ground, which is bullish for equities.

Happy trading!

Tom