As America approaches its 250th birthday, the Dow Jones Industrial Average — the oldest U.S. stock market index — capped a holiday-shortened week at fresh record highs, surpassing 52,500 points on Thursday.
The rally reflected a great rotation from AI capex names into the blue-chip industrials, benefiting from that same spending wave.
The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) has now risen 8.77% year-to-date, slightly outperforming the SPDR S&P 500 ETF Trust (NYSE:SPY).
Semiconductors pulled back for the second straight week, with the iShares Semiconductor ETF (NASDAQ:SOXX) slumping over 5%. The tech-heavy Invesco QQQ Trust (NASDAQ:QQQ) had a flat performance, dragged by chipmakers.
Chart: Dow Bottomed At 6,460 Points In March 2009 – It Has Risen 8-Fold Since Then
Jobs Cool, Rate Hike Off The Table
Job growth cooled sharply in June, with payrolls rising just 57,000 — well below the 115,000 consensus and down from a revised 129,000 in May. April was also cut by 31,000, bringing combined revisions to a net minus 74,000.
The unemployment rate ticked down to 4.2%, but only because labor force participation fell to 61.5%, the lowest since March 2021.
That was exactly what markets needed to quell rate-hike fears. The odds of a July move collapsed to roughly 20%, and traders now fully price the next hike only by December.
Bettors on Polymarket now price in only a 10% chance of a hike in July.
Warsh Debuts In Sintra
In his first international appearance, Fed Chair Kevin Warsh warned investors at the ECB Forum in Sintra not to expect an accommodating central bank while inflation sits above 2%.
Anyone in households, business or financial markets expecting the Fed to tolerate inflation above 2%, he said, "would be disappointed."
Yet he also flagged that inflation expectations have “moderated” since his May 22 swearing-in — a subtle dovish hint.
The moderation reflects the continued collapse in oil prices. WTI crude tumbled to $67 a barrel this week, fully erasing the war premium built up since the Iran conflict began in February, as transits through the Strait of Hormuz normalized.
Magnificent Seven Rebound After Black June
After a brutal June, the Magnificent Seven rebounded across the board. Microsoft Corp. (NASDAQ:MSFT) led the way, up 6.7% on the week following its worst month since 2000.
Among the week’s gainers, Apple Inc. (NASDAQ:AAPL) added 4.7% and Meta Platforms Inc. (NASDAQ:META) rose 5.8%.
Nike’s Tariff-Powered Beat
Nike Inc. (NASDAQ:NKE) reported fourth-quarter revenue of $10.97 billion, beating estimates. Headline EPS of $0.72 towered over the $0.13 consensus, but the beat was inflated by a $986 million IEEPA tariff refund — worth $0.52 per share. Strip that out and adjusted EPS came to $0.20, still above expectations.
Despite weakening sales in China, the stock rallied over 7% for the week.
Image created using artificial intelligence via Midjourney.
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