Your Capital Markets Snapshot: U.S. Capital Markets Continued Strong Upward Momentum

Last week, U.S. capital markets continued their strong upward momentum, with the S&P 500 and Nasdaq reaching new all-time highs. This rally was fueled by a combination of easing geopolitical tensions in the Middle East, falling oil prices, and a robust performance from mega-cap tech stocks. A better-than-expected U.S. jobs report also boosted investor sentiment, showing 147,000 new jobs added in June and a slight drop in the unemployment rate to 4.1%. However, the labor force participation rate declined, and private sector hiring was relatively soft, tempering some of the optimism. Markets also responded positively to a new U.S.-Vietnam trade agreement, which provided clarity on tariffs despite higher rates than previously expected. Meanwhile, Congress passed a significant tax and spending bill, which is expected to offer a modest economic boost in 2026 but raises concerns about long-term federal debt. Bond yields rose as the strong jobs data reduced expectations for imminent Fed rate cuts, with the 2-year Treasury yield climbing notably. Overall, while bullish momentum remains strong, markets may face volatility ahead due to potential trade developments and overbought conditions.