Stronger Than Expected Jobs Data May Lead To Initial Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a modestly higher open on Thursday, with stocks likely to see further upside after ending the previous session mostly higher.

Early buying interest may be generated in reaction to a closely watched Labor Department report showing employment in the U.S. increased by more than expected in the month of June.

The Labor Department said non-farm payroll employment shot up by 147,000 jobs in June after jumping by an upwardly revised 144,000 jobs in May.

Economists had expected employment to increase by 110,000 jobs compared to the addition of 139,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.1 percent in June from 4.2 percent in May. The unemployment rate was expected to inch up to 4.3 percent.

Buying interest may be somewhat subdued, however, as the stronger than expected jobs data is also likely to reduce the changes of a near-term interest rate cut by the Federal Reserve.

Traders may also be reluctant to make significant moves ahead of the Fourth of July holiday on Friday, with the markets set to close earlier than usual later today.

Stocks moved mostly higher over the course of the trading session on Wednesday, with the Nasdaq and the S&P 500 moving back to the upside following the pullback seen during Tuesday's trading.

The Nasdaq and the S&P 500 more than offset Tuesday's losses, once again reaching new record closing highs.

The tech-heavy Nasdaq jumped 190.24 points or 0.9 percent to 20,393.13 and the S&P 500 climbed 29.41 points or 0.5 percent to 6,227.42, although the narrower Dow edged down 10.52 points or less than a tenth of a percent to 44,484.42.

The strength on Wall Street came after President Donald Trump announced that he has reached a trade deal with Vietnam.

In a post on Truth Social, Trump said the terms of the deal call for Vietnam to pay a 20 percent tariff on goods sent to the U.S. and a 40 percent tariff on any transshipping.

"In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade," Trump said.

He continued, "In other words, they will 'OPEN THEIR MARKET TO THE UNITED STATES,' meaning that, we will be able to sell our product into Vietnam at ZERO Tariff."

The news of the trade deal helped overshadow a report from payroll processor ADP showing private sector employment in the U.S. unexpectedly decreased in the month of June.

ADP said private sector employment fell by 33,000 jobs in June after rising by a downwardly revised 29,000 jobs in May.

Economists had expected private sector employment to increase by 95,000 jobs compared to the addition of 37,000 jobs originally reported for the previous month.

Steel stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Steel Index up by 4.3 percent to a seven-month closing high.

Considerable strength was also visible among computer hardware stocks, as reflected by the 2.5 percent surge by the NYSE Arca Computer Hardware Index.

Energy, semiconductor and airline stocks also saw significant strength, while utilities and healthcare stocks bucked the uptrend.

Commodity, Currency Markets

Crude oil futures are edging down $0.03 to $67.42 a barrel after surging $2 to $67.45 a barrel on Wednesday. Meanwhile, after rising $9.90 to $3,359.70 an ounce in the previous session, gold futures are falling $21.60 to $3,338.10 an ounce.

On the currency front, the U.S. dollar is trading at 145.16 yen versus the 143.66 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1731 compared to yesterday's $1.1799.

Asia

Asian shares ended mixed on Thursday as investors reacted to a U.S.-Vietnam trade deal and awaited the monthly U.S. nonfarm payroll data later in the day for directional cues.

As companies face uncertainty from Donald Trump's shifting tariffs, supply chain disruptions and rising costs, the June employment report is expected to show slower hiring and the highest unemployment rate since 2021.

The dollar struggled to find direction, lingering around three-year lows after a slew of indicators pointed to a potential U.S. economic slowdown.

Gold was little changed above $3,350 per ounce, while oil prices fell nearly 1 percent due to concerns over weak U.S. demand.

China's Shanghai Composite Index edged up by 0.2 percent to 3,461.15 as the Trump administration lifted recent export license requirements for chip design software sales in China.

Hong Kong's Hang Seng Index fell 0.6 percent to 24,069.94, with EV and tech stocks pacing the decliners on fears over slowing Chinese growth. Earlier in the day, a private survey showed Chinese services activity growth hit a nine-month low in June.

Japanese markets fluctuated before ending little changed due to ongoing uncertainty over a trade deal with the United States and the threat of heavy tariffs.

The Nikkei 225 Index finished marginally higher at 39,785.90, while the broader Topix Index settled 0.1percent higher at 2,828.99. Steelmakers jumped, with JFE Holdings surging 5.4 percent.

Seoul stocks rose sharply, with sentiment underpinned by the revision of the shareholder-friendly Commercial Act and expectations around Seoul's trade talks with the United States. The Kospi rallied 1.3 percent to 3,116.27, led by gains in steel and tech stocks.

Australian markets recovered from an early slide to end on a flat note after closing at a record high the previous day.

Banks succumbed to profit taking, with Commonwealth Bank of Australia falling 2.2 percent. Mining giant BHP surged 5.6 percent in its best session in over four years.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index fell 0.6 percent to 12,704.48, snapping a five-day winning streak.

Europe

European stocks have moved mostly higher during trading on Thursday amid a positive reaction to the latest U.S. jobs data.

Investor sentiment was also underpinned by the announcement of a trade deal between the United States and Vietnam and a decision by the Trump administration to ease export restrictions on China for chip design software and ethane.

The U.K.'s FTSE 100 Index is up by 0.6 percent, the German DAX Index is up by 0.4 percent and the French CAC 40 Index is up by 0.2 percent.

U.K. bonds and the pound rose after British Prime Minister Keir Starmer backed Rachel Reeves to be Chancellor "into the next election and for many years after".

In corporate news, German wind turbine manufacturer Nordex SE has jumped on bagging news deals in the U.K., Belgium and France.

Murray Income Trust has also advanced after its board launched a surprise strategic review.

3i Infrastructure has also moved to the upside after it reported fiscal first quarter total income in line with expectations.

Meanwhile, Novartis AG has fallen. The Swiss company said its drug Cosentyx failed in a late-stage study of patients suffering from inflammation in their blood vessels.

British luxury retailer Watches of Switzerland has also slumped after it warned of a margin hit from U.S. tariffs.

U.S. Economic News

A closely watched report released by the Labor Department on Thursday showed employment in the U.S. increased by more than expected in the month of June.

The Labor Department said non-farm payroll employment shot up by 147,000 jobs in June after jumping by an upwardly revised 144,000 jobs in May.

Economists had expected employment to increase by 110,000 jobs compared to the addition of 139,000 jobs originally reported for the previous month.

The report also said the unemployment rate edged down to 4.1 percent in June from 4.2 percent in May. The unemployment rate was expected to inch up to 4.3 percent.

The Labor Department also released a separate report on Thursday showing an unexpected decrease by first-time claims for U.S. unemployment benefits in the week ended June 28th.

The report said initial jobless claims edged down to 233,000, a decrease of 4,000 from the previous week's revised level of 237,000.

Economists had expected jobless claims to inch up to 240,000 from the 236,000 originally reported for the previous week.

The Labor Department said the less volatile four-week moving average also slipped to 241,500, a decrease of 3,750 from the previous week's revised average of 245,250.

A report released by the Commerce Department on Thursday showed the U.S. trade deficit widened in the month of May amid a steep drop by the value of exports.

The Commerce Department said the trade deficit climbed to $71.5 billion in May from a revised $60.3 billion in April.

Economists had expected the trade deficit to increase to $71.0 billion from the $61.6 billion originally reported for the previous month.

The wider trade deficit came as the value of exports tumbled by 4.0 percent to $279.0 billion, while the value of imports edged down by 0.1 percent to $350.5 billion.

At 10 am ET, the Institute for Supply Management is scheduled to release its report on service sector activity in the month of June. The ISM's services PMI is expected to inch up to 50.5 in June from 49.9 in May, with a reading above 50 indicating growth.

The Commerce Department is also due to release its report on new orders for manufactured goods in the month of May at 10 am ET. Factory orders are expected to spike by 8.2 percent in May after tumbling by 3.7 percent in April.

At 11 am ET, the Treasury Department is scheduled to announce the details of this month's auctions of three-year and ten-year notes and thirty-year bonds.

Atlanta Federal Reserve President Raphael Bostic is also due to deliver a keynote speech on monetary policy in the IMFS Distinguished Lecture Series hosted by Institute for Monetary and Financial Stability at 11 am ET.