Trade Optimism, Job Strength, and TSX Joins the Rally
Week Ending July 4, 2025
Markets delivered solid gains over the shortened holiday week, driven by optimism around trade developments, stronger-than-expected job data, and continued economic resilience in both the U.S. and Canada. The Toronto Stock Exchange participated in the global rally, bolstered by strength in financials and energy.
Market Overview
Weekly Performance (June 30–July 4, 2025):
S&P 500: +1.72%
Nasdaq Composite: +1.62%
Dow Jones Industrial Average: +2.30%
MSCI EAFE (International Developed Markets): +0.19%
TSX (Toronto Stock Exchange): +1.05%
Trade Developments Boost Sentiment
Markets kicked off July on a slightly cautious note, with the S&P 500 and Nasdaq pulling back modestly on Monday while the Dow posted a small gain. However, investor sentiment improved midweek as Canada officially withdrew its proposed digital services tax—a move applauded by global tech firms—and the U.S. announced a new trade agreement with Vietnam.
These developments helped push markets higher, with both the S&P 500 and Dow Jones Industrial Average closing the week at fresh record highs.
Job Market Resilience Reassures Investors
Economic data added to the market's positive tone. While the ADP report showed a decline in private payrolls—the first in two years—investors were quickly reassured by Friday’s stronger-than-expected U.S. employment report:
147,000 new jobs were added in June, exceeding expectations
Unemployment ticked down to 4.1% from 4.2%
Upward revisions to April and May added another 16,000 jobs
While hiring strength was concentrated in government and healthcare, the broader message was clear: the U.S. labor market remains healthy despite trade uncertainties. Companies continue to adopt a “no hire, no fire” posture as they await further clarity on economic policy.
Canadian Markets Join the Upside
The S&P/TSX Composite Index rose 1.05%, with gains led by financials and energy. Investor confidence was lifted by the broader global trade optimism, alongside a continued rebound in key commodity prices. While the Canadian jobs report is due next week, early expectations suggest steady employment trends in sectors tied to domestic demand.
Positive Economic Signals
Two key themes emerged during the week:
Trade Winds Shifting Favorably
Canada’s decision to pull back on digital taxation and new trade ties between the U.S. and Vietnam helped improve global investor sentiment.Labor Market Remains Firm
Despite sector-specific softness, headline job numbers were stronger than forecast, reinforcing confidence in North American economic growth.
Key Economic Reports: Week Ahead (July 7–11, 2025)
Tuesday, July 8
NFIB Small Business Optimism Index
U.S. Consumer Credit
Wednesday, July 9
Wholesale Inventories
10-Year Treasury Note Auction
June Fed Meeting Minutes
Thursday, July 10
Weekly Jobless Claims
Fed Commentary: St. Louis Fed President Musalem, San Francisco Fed President Daly
Friday, July 11
U.S. Federal Budget
Canada: June Employment Report
Corporate Earnings
No major U.S. or Canadian companies are scheduled to report earnings this week.
Markets remain in a pre-earnings lull, with second-quarter results set to roll out later in July.
“"People are like stained-glass windows. They sparkle and shine when the sun is out, but when the darkness sets in, their true beauty is revealed only if there is a light from within.”
-Dr. Elisabeth Kübler-Ross
Alexandra’s mom had four children. The first one was named May, the second was named June, and the third was named August. What was the fourth child's name?
Last Week's Riddle:There are two of them; one can usually see what the other sees, but they can never see each other. What are they?
Answer: Eyes
Joanne's son, Matthew, enjoying some beach time on Savary Island!
Footnotes and Sources
1.WSJ.com, July 3, 2025
2. Investing.com, July 3, 2025
3. CNBC.com, June 30, 2025
4. WSJ.com, July 2, 2025
5. CNBC.com, July 3, 2025
6. WSJ.com, July 3, 2025
7. IRS.gov, November 8, 2024
8. SNAP-Ed Connection, U.S. Dept. of Agriculture, March 18, 2025
Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.
The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.
The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. The Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and considered a broad indicator of the performance of stocks of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.
Please consult your financial professional for additional information.