With the BLS June Non-farm payroll report out at 8:30 am ET, here's how the major averages have fared over the first three days of this shortened week.
As of Wednesday's closing bell, the Dow is up 429 thanks primarily to Alphabet being added to the index on Monday. The NASDAQ is up 742 points (2.93%), and the S&P is ahead by 129 points. The week is bifurcated, with Monday and Tuesday the last two sessions of the second quarter. Wednesday and Thursday are the first two days of the third quarter and markets are closed on Friday.
Wednesday's mid-day reversal was notable. The Dow had been up more than 400 points by noon, but old off all afternoon to end the session lower. The other indices followed a similar pattern, though the NASDAQ spent almost the entire session in the red. There's a cohort of analysts believing that the third quarter might be a bit bumpy, though their theory, as mentioned in Money Daily on Wednesday, fails to consider that second quarter earnings are expected to be very strong. As earnings reports begin to flow to the street next week, one thing to watch for is selling on strong reports. We've seen this kind of action before, indicative of overall momentum exhaustion and profit-taking at high levels.
Should that kind of action become normative in the early sessions led by earnings, it would offer a clue that stocks are hitting unsustainable levels. May happen, but there's also the distinct possibility that stocks will just continue to surge higher on what's been fairly solid economic data and second quarter earnings.
The June employment report from the BLS showed the country created 57,000 net new jobs, below consensus estimates, with the unemployment rate steady at 4.2%. The knee-jerk reflex reaction in the futures market was euphoric, the market once again using pretzel logic to goose stocks higher, the thinking being one of poor employment triggering rate cuts at the Fed to stimulate the economy, the exact opposite of what the expert class had been predicting. In a sense, they're both wrong, as the Fed is very likely to do nothing concerning rate adjustments until after September and possibly through the end of the year.
All stock futures were already higher prior to the BLS announcement, but screamed higher on the release. Oddly enough, precious metals were not unceremoniously dumped, but rather, rallied, with gold up nearly $100, above $4,100, and silver peaking over $61.
There are assorted theories and analyses that rely on government data to reach their conclusions about market and economic activity, many of them slanted by varying degrees on data that is either seasonally adjusted or clouded by assumptions built into models. With the new Federal Reserve under the chairmanship of Kevin Warsh, these projections and prognostications - many by some of the leading banking and financial institutions - are likely to draw false conclusions because the Fed is returning to a policy that is less open and less accommodating than those of Bernanke, Yellen, and Powell, which encouraged front-running and speculation.
The long-standing policy of the Fed through the Greenspan years was more stand-offish and opaque and that's the direction Warsh is moving towards. He's also openly stated that the Fed would seek to move away from reliance on government data in an effort to be better informed on the realities of markets and economics in real terms. Thus, with forecasting policy direction now shredded out of existence, predicting the future of rate movement and general economic activity will be more of what you know rather than who you know. It's a welcome change.
Happy 4th of July, America. 250 years is good enough cause for celebration no matter the economic conditions.
At the Close, Wednesday, July 1, 2026:
Dow: 52,305.24, -13.96 (-0.03%)
NASDAQ: 26,040.03, -173.69 (-0.66%)
S&P 500: 7,483.23, -16.13 (-0.22%)
NYSE Composite: 23,737.18, -97.05 (-0.41%)
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