✅ Written by Austin DeNoce, Markets Reporter, Walk-On Holdings

✅ Edited by Casimir Stone, Creative Director Walk-On Holdings

This Week in US Markets: Record Highs for S&P 500 and Nasdaq in Q3 Kickoff

This week in U.S. markets, the S&P 500 and Nasdaq Composite pushed to new record highs to start the first week of the third quarter.

In economic news, Chair Powell spoke at a central banking forum in Portugal where he suggested we are getting back on the previous disinflationary path, but more progress is needed. He added that he and the committee are aware that cutting too soon could undo their progress while cutting too late could undermine the economic recovery.

In the labor market, the Non-Farm Payroll report showed the U.S. added 206,000 in June compared to the 200,000 expected. The unemployment rate also increased from 4% to 4.1%. The ADP employment released earlier in the week showed private companies added 150,000 jobs in June, fewer than expected. ADP’s chief economist, Nela Richardson, added, “Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.” 

Unemployment claims last week edged higher, hitting the third-highest level of the year. However, the number of job openings in May increased more than expected to roughly 8.1 million while U.S. employers announced just under 49,000 layoffs in June 2024, a more than 20% decline from May but still roughly 20% higher than June. Nevertheless, the data showed the overall labor market is indeed cooling.

In other economic news, business activity in the manufacturing sector contracted for the third consecutive month in June, reaching its lowest level since February. The ISM services PMI also showed activity in the services sector contracting at its fastest pace since April 2020. Elsewhere, the 30-year mortgage rate increased to 6.95%, rebounding from a near-three-month low. Finally, the U.S. balance of trade in May widened to $75.1 billion, the largest since October 2022.

In company news, the magnificent seven had a great week. Amazon stock rose to a record high after analysts in a recent Refinitiv poll projected the company’s international logistics unit would finally turn an annual profit. Microsoft, Apple, and Meta stock also notched fresh record highs. Meanwhile, Tesla shares surged after beating second-quarter delivery estimates, reporting just shy of 444,000. However, the week was less forgiving to Chinese EV makers. Xpeng and NIO both saw their shares tumble after the E.U. announced provisional tariffs between 17.4% and 37.6% on electric vehicles.

In health care, drugmakers, including Eli Lilly and Novo Nordisk, were under pressure after President Biden and Senator Bernie Sanders called on them to cut prices for their weight-loss and diabetes drugs. In the aviation sector, Boeing agreed to repurchase its previously spun-off supplier Spirit AeroSystems for $4.7 billion to improve its quality control. Elsewhere, Southwest Airlines adopted a shareholder rights plan commonly known as a “poison pill” to prevent activist investor Elliott Management from ousting CEO Bob Jordan. 

In media and entertainment, Paramount Global shared it is in talks with other entertainment companies to merge its streaming service Paramount+ with another existing platform. The following day, Paramount announced it had reached a preliminary merger deal with Skydance Media. We also saw some M&A developments in retail after Arkhouse Management and Brigade Capital Management raised their buyout offer for Macy’s by roughly $300 million to $6.9 billion.

Other notable company news this week included JPMorgan rising to a record close after increasing its dividend and announcing a new $30 billion stock buyback plan. Shares of British chipmaker Arm also jumped after the Labour Party’s victory in the U.K. Finally, Reddit trader “Roaring Kitty” revealed he had a 6.6% stake in the pet retailer Chewy. GameStop investors also announced they are suing Roaring Kitty, alleging they lost money through a "pump and dump" scheme.