Weekly Market Report for July 3-7, 2023

Weekly Market Report for July 3-7, 2023
  • Markets
    • Dow Jones Industrial Average  -1.8%
    • S&P 500  -1.1%
    • Russell 2000  -1.2%
    • NASDAQ  -1% 

All major U.S. equity markets finished the week lower following strong jobs data. Robust labor reports released two significant data points: nearly half a million jobs were added in the month of June (ADP) and job cuts reached an eight-month low. When more individuals are working it means those individuals have money to spend, and they do just that. Increases to consumer spending can cause prices to rise, also known as inflation. And how does the Federal Reserve combat inflation? By raising the federal funds rate.. Increases to federal funds rate causes increases to Treasury yields. When the yields on Treasuries jump higher, investors exit the stock market and enter the bond market in efforts to lock in higher yields. This is what we saw last week and is the reason why equity markets dropped.

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