Global Highlights This Week: U.S. Non-Farm Payrolls in Focus as Stocks Hit New Highs

Following the Iran-Israel ceasefire and rising Fed rate-cut expectations, the Nasdaq and S&P 500 achieved record highs last week, marking a historic rebound. This week, investors will focus on key economic data and U.S. trade policies to gauge whether the stock market’s strong rally can continue.

 

With the first half’s rollercoaster ride nearing its end, the S&P 500 is up ~5% year-to-date. Historically, July has been the strongest month for U.S. stocks over the past 15 years, averaging a 2.9% gain.

 

This week, the spotlight is on U.S. non-farm payrolls, with June expected to add 110,000 jobs, down from May’s 139,000, and a slight unemployment rate increase.

Weak non-farm data could bolster rate-cut expectations, with investors eyeing whether inflation has cooled enough to permit cuts. ING economist James Knightley noted, “The Fed needs clearer signs of economic weakness, like slower job growth and rising unemployment, to act early.”

 

Fed Chair Powell told Congress last week that higher tariffs could push inflation up this summer as the Fed weighs rate-cut timing. However, Fed Governors Michelle Bowman and Christopher Waller supported easing policy as early as July, prompting traders to reassess rate paths.

 

Last week, federal funds futures trading showed growing bets on further Fed rate cuts this year.

 

Meanwhile, President Trump again criticized Powell, stating he has three to four candidates in mind for the next Fed Chair. Powell’s term ends in May 2026, but successors are typically announced three to four months prior, not eight to ten months early. Trump’s “shadow chair” strategy could heighten U.S. economic uncertainty and market volatility.

 

On trade, July 9 marks the end of a 90-day pause on U.S. “reciprocal tariffs,” with the White House hinting at a possible extension. Treasury Secretary Besant said Friday that trade deals with several countries could be finalized by September 1, naming 18 key U.S. trade partners.

 

However, Trump’s abrupt termination of Canada trade talks, citing Canada’s dairy tariffs and “unfair” digital services tax on U.S. tech firms, cooled market sentiment, signaling ongoing tariff risks.

 

Geopolitically, the Iran-Israel ceasefire hasn’t fully calmed Middle East tensions. On Friday, Trump abandoned plans to lift Iran sanctions and considered bombing Iran over uranium enrichment. Israel’s Defense Minister Katz ordered new military plans targeting Iran, calling the “Rising Lion” operation a prelude to broader policies.

 

Notably, Fox News reported on June 28, via Global Times, that as Iran reopened parts of its airspace, the U.S. Virtual Embassy in Iran urged American citizens to leave immediately, citing significant regional risks.

Key Events This Week:

Monday: China June Official Manufacturing PMI, UK Q1 GDP (final), UK Q1 Current Account, Switzerland June KOF Leading Indicator, Germany June Adjusted Unemployment Rate, UK May BoE Mortgage Approvals, Germany June CPI, U.S. June Chicago PMI, U.S. June Dallas Fed Business Activity Index, Atlanta Fed President Bostic speaks on U.S. economic outlook, ECB hosts Central Banking Forum in Sintra.

 

Tuesday: China June Caixin Manufacturing PMI, UK June Nationwide House Price Index, Switzerland May Retail Sales, Eurozone June Manufacturing PMI , UK June Manufacturing PMI , Eurozone June CPI , U.S. June S&P Global Manufacturing PMI, U.S. June ISM Manufacturing PMI, U.S. May JOLTs Job Openings, U.S. May Construction Spending, Chicago Fed President Goolsbee speaks, ECB President Lagarde speaks, global central bank governors hold panel discussion, Hong Kong Exchange closed.

 

Wednesday: Eurozone May Unemployment Rate, U.S. June Challenger Job Cuts, U.S. June ADP Employment, U.S. EIA Crude Oil Inventories, U.S. EIA Cushing Crude Oil Inventories.

 

Thursday: China June Caixin Services PMI, Switzerland June CPI, Eurozone June Services PMI, UK June Services PMI, U.S. June Unemployment Rate, U.S. June Non-Farm Payrolls, U.S. Initial Jobless Claims, U.S. May Trade Balance, U.S. June ISM Non-Manufacturing PMI, U.S. May Factory Orders, U.S. EIA Natural Gas Inventories, ECB releases June monetary policy meeting minutes, Atlanta Fed President Bostic speaks on U.S. monetary policy, U.S. markets close early at 1:00 AM Beijing Time on July 4.

 

Friday: U.S. Oil Rig Count, France May Industrial Production, Switzerland June Adjusted Unemployment Rate, Eurozone May PPI, U.S. markets closed.