Market View: Week of Jul. 3, 2026
ECONOMIC REVIEW¹
The U.S. added 57,000 jobs in June, missing expectations of 110,000 and below a downwardly revised 129,000 in May. It is the lowest job gain in four months, following three consecutive months of stronger-than-expected gains.
The US unemployment rate dropped to 4.2% in June, down from 4.3% in May and below expectations, likely because many people left the workforce.
The broader U-6 unemployment rate in the US, which includes discouraged and underemployed workers, decreased to 7.9% in June 2026 from 8.1% in the previous month.
The Labor Force Participation Rate in the United States decreased by 0.3% to 61.5% in June. It is the lowest rate since March 2021, as 720k people left the labor force.
Job openings increased by 9,000 to 7.59 million in May, the highest since May 2024 and well above market expectations of 7.30 million.
The quits rate stood at 1.9% in May, the lowest reading since 2020, unchanged from April, signaling subdued voluntary job departures.
The ISM Manufacturing Index declined to 53.3 in June, lagging the consensus expected 53.9.
The prices index declined sharply to 73.0 from 82.1, indicating some easing in cost pressures, though price growth remained elevated.
Average hourly earnings for all employees on U.S. private nonfarm payrolls rose by 0.3% in June, the same pace as in May and matching market forecasts.
Average hourly earnings have increased by 3.5% since last year, a number that was also in line with market estimates.
How does the most recent economic data impact you?
The likelihood of an interest rate cut remains low. While the labor market continues to show resilience, inflation remains elevated enough to keep the Federal Reserve (Fed) on hold.
Worries over oil prices leading to higher inflation remain a key focus for the Fed as it balances its dual mandate of maximum employment and price stability.
Wage growth continues to lag inflation for many households, particularly lower- and middle-income earners, reinforcing concerns about a divergence in the economy.
A LOOK FORWARD¹
This week’s economic data will include the release of the ISM Services PMI and the Federal Open Market Committee (FOMC) Minutes.
How does this week’s slate of economic data impact you?
Investors will get a clearer view of the health of the U.S. economy, which is primarily driven by the services sector, while also gaining further insight into the Federal Reserve's discussions and what transpired during Kevin Warsh's first meeting as Fed Chair.
MARKET UPDATE²
| Market Index Returns as of 7/3/26 | WTD | QTD | YTD | 1 YR | 3 YR | 5 YR |
|---|---|---|---|---|---|---|
| S&P 500 | 1.78% | -0.21% | 9.98% | 20.60% | 20.48% | 13.07% |
| NASDAQ | 2.12% | -1.45% | 11.49% | 26.15% | 24.04% | 12.86% |
| Dow Jones Industrial Average | 1.99% | 1.12% | 10.99% | 19.96% | 17.52% | 10.84% |
| Russell Mid-Cap | 0.68% | 0.01% | 15.31% | 19.39% | 16.39% | 8.34% |
| Russell 2000 (Small Cap) | -0.42% | -0.93% | 21.43% | 34.87% | 18.06% | 6.83% |
| MSCI EAFE (International) | 2.76% | 1.70% | 11.30% | 22.26% | 17.00% | 9.31% |
| MSCI Emerging Markets | 1.02% | 0.01% | 23.86% | 42.31% | 22.24% | 7.50% |
| Bloomberg US Agg Bond | -0.50% | -0.14% | 0.48% | 4.11% | 4.18% | 0.03% |
| Bloomberg High Yield Corp. | 0.29% | 0.09% | 2.05% | 5.78% | 8.87% | 4.15% |
| Bloomberg Global Agg | -0.19% | -0.08% | -0.29% | 0.61% | 3.40% | -1.57% |
OBSERVATIONS
Large-cap domestic equities broadly rebounded last week, led by the NASDAQ, which gained +2.12%. The S&P 500 (+1.78%) and Dow Jones Industrial Average (+1.99%) also posted strong gains.
Mid-cap stocks participated in the rally, with the Russell Midcap Index advancing +0.68%, while the Russell 2000 was the only major domestic equity index to finish lower, declining -0.42%.
Developed international equities outperformed all major equity indices last week, gaining +2.74%, while emerging markets also posted a solid advance of +1.02%.
• High-quality, domestic fixed income as measured by the US Aggregate Bond Index fell -0.50%, while international fixed income slipped -0.19%. Non-investment-grade bonds, however, outperformed, up 0.29%.
BY THE NUMBERS
Rising Oil Supply Reduces Iran's Leverage:
The oil market has flipped from shortage fears to surplus concerns, which weakens Iran’s leverage in talks. Oil prices have fallen back toward prewar levels, tanker traffic through the Strait of Hormuz is recovering, and Gulf producers like Saudi Arabia, the UAE, and Kuwait are ramping up supply. At the same time, global oil inventories had fallen to their lowest level since 1990, and rebuilding reserves will take time. Capital Economics estimates replenishing the U.S. Strategic Petroleum Reserve could take 15 to 18 months even at 200,000 barrels per day. China also does not appear to be rushing to refill reserves, with June seaborne crude imports around 6 million barrels per day, roughly 4 million barrels per day below its 2025 average. Overall, lower prices and rising supply reduce Iran’s ability to use oil as a bargaining chip.³
White House Pushes to Overturn World Cup Red Card:
The White House launched an unprecedented effort to overturn Folarin Balogun's World Cup red card after he was sent off in the U.S.'s Round of 32 victory over Bosnia and Herzegovina. With Balogun leading the U.S. team with three goals in the tournament, senior administration officials, including President Donald Trump, reportedly contacted Gianni Infantino multiple times to request a review. In a rare move, FIFA invoked Article 27 of its disciplinary code to suspend Balogun's automatic one-match ban, allowing him to play against Belgium while placing him on a one-year probationary period. The decision sparked significant backlash from Belgium and European football officials, who argued it set a troubling precedent by allowing political influence to affect FIFA's disciplinary process.⁴
Disclosures
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1 Data obtained from Bloomberg as of 7/3/26.
2 Data obtained from Morningstar as of 7/3/26.
3 A sudden glut of oil threatens to weaken Iran’s hand in talks
4 Inside the White House campaign to overturn a World Cup red card
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