Making sense of the forces driving global markets

By Lewis Krauskopf, Markets Reporter

Jamie is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what moved markets today. A long holiday weekend awaits U.S. investors, but not before digesting a heaping portion of economic data and perhaps more developments on fiscal and trade policy. I'd love to hear from you, so please reach out to me with comments at Lewis.Krauskopf@thomsonreuters.com.

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U.S. investors have some potentially market-moving developments to chew over before heading out for their July 4 Independence Day gatherings.

Top of mind heading into Thursday is the U.S. employment report for June. Investors may be wary about a disappointment, especially after Wednesday's weak private payrolls data, which showed a drop for the first time in over two years.

Economists are estimating an increase of 110,000 jobs in U.S. nonfarm payrolls for June, and an unemployment rate of 4.3%. The jobs report will be one of last key economic releases before the Federal Reserve's next meeting at the end of the month.  

A weak jobs report could further fuel expectations for interest rate cuts in coming months. Investors, as indicated by Fed Fund futures, already have been ramping up such bets on the amount of expected easing. September is seen as almost a certainty for the next rate cut, if the central bank does not first ease at the July meeting, which futures suggest is a roughly one-in-four chance. 

Graphics are provided by Reuters.

Wall Street, meanwhile, was back at record high levels on Wednesday, with the benchmark S&P 500 and tech-heavy Nasdaq both rebounding after day-earlier losses.

President Donald Trump said the U.S. struck a trade deal with Vietnam that sets 20% tariffs on many of the country's exports. Shares of Nike and other apparel makers rose after news of the trade deal, which would impose a lower than initially expected tariff rate.

The agreement could prove to be an appetizer to more trade news as a closely watched deadline of July 9 nears. That's when many of the harsh tariffs from Trump's April "Liberation Day" announcement may go into effect if agreements with trading partners are not reached.

In other policy developments, the House of Representatives was weighing Trump's massive tax-cut and spending bill, a day after the Senate narrowly passed the legislation. Trump has urged lawmakers to pass the bill by the July 4 holiday.

U.S. Treasury yields were modestly higher on Wednesday amid fiscal concerns about the legislation, which nonpartisan analysts say will add $3.4 trillion to the nation's debt over the next decade.

Stock and bond markets in the U.S. were set for early afternoon closes on Thursday and will be closed on Friday for the holiday.