Closing Recap

U.S. stocks finished mixed in a rotational session, with the Dow and small caps rallying while the tech-heavy Nasdaq lagged; gold and oil gained, and the dollar reversed to finish higher despite ongoing policy uncertainty and mixed economic data. 

Key Takeaways 

• Rotational Day: Markets saw a clear rotation out of recent large-cap tech winners and into other areas, including cyclicals, defensives, and small caps. 
• Strong Breadth: NYSE breadth was strong (advancers led decliners 3:1), indicating broad participation in the rally outside of mega-cap tech. 
• Trump Tariff Talk: Late-day comments from President Trump doubting a deal with Japan and suggesting tariffs could be an option injected some caution into markets. 
• Senate Passes Tax Bill: The Senate passed the Trump-backed tax and spending bill, teeing it up for a final House vote. 
• Mixed Economic Data: JOLTS job openings and S&P Manufacturing PMI beat expectations, but ISM Manufacturing showed ongoing contraction, and construction spending fell. 
• Dollar Reverses, Gold & Oil Gain: The U.S. dollar reversed early losses to finish higher. Gold and oil prices both posted solid gains. 

Market Overview 

U.S. equity markets kicked off July with a mixed but broadly positive session, characterized by a significant rotation away from recent mega-cap technology leaders and into other areas of the market. While the tech-heavy Nasdaq finished in the red, weighed down by profit-taking in “Magnificent Seven” names, the Dow Jones Industrial Average posted strong gains, and small caps (Russell 2000) surged. Overall market breadth was very strong, with advancers outpacing decliners by a 3:1 margin, indicating broad underlying strength. Cyclical sectors like Materials and Industrials, along with defensives like Healthcare and Consumer Staples, all participated in the rally. 

Index	Up/Down	% Change	Last
DJ Industrials	400.17	0.0091	44494
S&P 500	-6.94	-0.0011	6198
Nasdaq	-166.85	-0.0082	20202
Russell 2000	20.43	0.0094	2195

The day saw significant moves in specific sub-sectors. Homebuilders, solar stocks (on positive tax credit news from the Senate bill), and casino stocks (on strong Macau revenue) all surged. The Dow Transports index also jumped over 3%. On the downside, some home health and diabetes-related stocks fell on proposed Medicare payment cuts. Economic data was mixed; while JOLTS job openings and the S&P Manufacturing PMI were stronger than expected, the ISM Manufacturing report remained in contraction for June, and construction spending fell. 

Late in the day, President Trump introduced a note of caution, expressing doubts about securing a trade deal with Japan and suggesting tariffs are still a possibility, while also indicating he does not plan to extend the current tariff “pause” past its July 9th deadline. This tempered some of the earlier enthusiasm. The major news out of Washington was the Senate’s narrow passage of the Trump-backed tax and spending bill, which now heads to the House for a final vote.

Economic Data

Economic data yesterday was mixed, with strong JOLTS and S&P PMI data contrasting with a weak ISM manufacturing report and a drop in construction spending. 

• JOLTS Job Openings (May): 7.769M (Above 7.300M consensus). 
• S&P Manufacturing PMI (June – Final): 52.9 (Above 52.0 forecast and prior, best since May 2022). 
• Construction Spending (May): -0.3% m/m (vs. -0.2% consensus). 
• ISM Manufacturing PMI (June): 49.0 (Above 48.8 consensus, vs. 48.5 May). Prices Paid 69.7. New Orders 46.4 (weak). Employment 45.0 (weak). 
• Dallas Fed Services Sector (June – Outlook): General business activity outlook improved to -4.4 from -10.1. 
• Atlanta Fed GDPNow (Q2 Forecast): Revised lower to 2.5% from 2.9%. 

Commodities, Currencies, and Treasuries 

Gold prices posted solid gains, with August futures rising $42.70 (+1.27%) to settle at $3,349.80 per ounce. The move was likely supported by the dollar’s initial weakness and persistent underlying demand for inflation hedges and safe havens. Crude oil prices also finished higher, with WTI up $0.34 (+0.52%) to $65.45/bbl, benefiting from positive PMI data out of China overnight and the broader risk-on sentiment in equities. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.34	USD/bbl	65.45
Brent	0.37	USD/bbl	66.9
Gold	42.7	USD/oz	3349.8
EUR/USD	-0.0009	USD	1.1777
USD/JPY	-0.27	JPY	143.72
10-Year Note	0.035	%	0.04261

The U.S. dollar experienced a significant intraday reversal; after falling to multi-year lows against currencies like the Euro and Swedish Franc early in the day, it rebounded strongly to finish higher. Treasury yields were mixed, with the 10-year yield ticking up about 3.5 basis points to 4.261% after a volatile session.

Looking Ahead 

The market will be watching for the House vote on the tax and spending bill tomorrow. Key jobs data is on tap in the coming days, with ADP private payrolls tomorrow and the official Nonfarm Payrolls report on Thursday (a day early due to the Friday holiday). This data will be critical for shaping the market’s view on the economy’s health and potential Fed policy moves. President Trump’s comments on trade with Japan will also keep tariff concerns on the radar.