Markets Rise Early After Jobs Report Disappoints
Published as of: July 2, 2026, 9:20 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® Index | 7,483.23 | -16.13 | -0.22% |
| Dow Jones Industrial Average® | 52,305.24 | -13.96 | -0.03% |
| Nasdaq Composite® | 26,040.03 | -173.69 | -0.66% |
| 10-year Treasury yield | 4.46% | -0.02 | -- |
| U.S. Dollar Index | 100.63 | -0.77 | -0.76% |
| Cboe Volatility Index® | 15.98 | -0.61 | -3.68% |
| WTI Crude Oil | $67.31 | -$1.27 | -1.85% |
| Bitcoin | $61,330.70 | +$2,809.20 | +4.80% |
(Editor's note: U.S. markets are closed Friday, July 3, in observance of the U.S. Independence Day holiday. The Schwab Market Update will return on Monday, July 6.)
(Thursday market open) Major stock indexes rose before the open after a disappointing jobs report, which showed only 57,000 jobs were created last month, about half the number expected. The Federal Reserve will now watch to see whether falling energy prices sap some of the inflationary pressures currently driving prices higher.
"This should allow the Fed to take a patient approach to any shift in its policy over the next few months, seeing how the incoming economic data comes in rather than rushing to a decision to hike," said Collin Martin, head of fixed income research and strategy at the Schwab Center for Financial Research (SCFR). Markets will be closed tomorrow for the Independence Day holiday and will reopen Monday, which looks to be a quiet day with little in the way of major earnings reports or economic data due out. One exception: the June ISM Services PMI®.
On Wednesday, the major indexes fell—the Dow only barely—to kick off the second half of the year. Meta (META) stock surged after Bloomberg reported that the company planned to enter the cloud business and sell access to AI computing power, while AI infrastructure companies CoreWeave (CRWV) and Nebius Group (NBIS) plummeted, helping drag the Nasdaq lower. Chipmakers also fell. Still, a majority of S&P 500 stocks—and sectors—rose on the day, a further sign of market rotation.
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Three things to watch
- Jobs report quick take: At the end of a week full of labor market data, a disappointing jobs report should give the Fed some "wait-and-see" time regarding inflation and rate hikes. While the 57,000 new jobs came up short of economist expectations, the unemployment rate ticked down to 4.2% from 4.3%. The jobs market remains on solid footing, but appears less robust than previously, with revisions taking some of the luster off of last month's stellar report. "The drop in the unemployment rate is welcomed, but much of the drop was driven by a drop in the participation rate, meaning people actually left the workforce," Martin said. The futures market showed falling expectations for a Fed hike later this year. According to the CME Group's FedWatch Tool, traders see a 50.7% chance of a hike in September, down from 62.8% before the release, and a 75.6% chance by the end of the year, down from 83.1%.
- Yen's 40-year low raises concerns about intervention, volatility: The U.S. dollar's 40-year high against the Japanese yen this week has fueled speculation and jitters about market intervention by the Japanese government, with the seemingly always crowded "yen carry" and yen short trades still offering potential to roil markets in Japan and the U.S. Any sudden yen rally, whether from intervention or an unexpectedly hawkish move by the Bank of Japan, can serve as a trigger. That's what happened almost exactly two years ago, in July 2024, when the yen was at about the same level as now. A soft U.S. inflation print caused the dollar to weaken, and the Japanese government took the opportunity to jump into the market. The yen gained nearly 3% in a single day—a huge move for a currency—and almost 9% over four weeks. Over roughly the same four weeks, the Nikkei 225 fell 25% and the S&P 500 Index lost about 8%.
- Small cap stocks are having a moment: The Russell 2000® (RUT) gained 22% during the first half of the year, its best since 1991 and well above the S&P 500's 9.6% gain. In fact, the RUT topped the S&P for two consecutive quarters, the first time that's happened since 2021. What's driving this performance by small caps? Clearly, it represents a broadening of market participation, and generally signals growing confidence in the economy, as smaller companies' earnings are more sensitive to economic conditions. As some of the mega-cap tech names have faltered, particularly in the second quarter, small caps have seen inflows in some of the same speculative sectors, such as AI and quantum computing. But that's not all. Energy, biotech, and health care have also caught bids, and small-cap value stocks have kept pace with their growth counterparts. All of which is healthy for stocks generally. But how long can the move last? The only thing we can say for sure is that past performance is no guarantee of future results.
Crypto currents
On-chain data shows bitcoin buying beneath the surface: Net outflows of funds from spot bitcoin exchange-traded products (ETP) are regaining speed, with the seven-day average hitting the highest level in about a month on Monday. The total since May 1: $8.74 billion. But there are hopeful signs for bulls as bitcoin sits just above its bear market low. Both long-term holders, with positions at least 155 days old, and so-called whales, with at least 1,000 bitcoins, have been buying steadily in recent weeks, though in modest volumes, according to Glassnode data. Their analysts call that "an encouraging sign that conviction is beginning to rebuild beneath the surface." An even more constructive sign is that smaller position holders (those with less than one bitcoin) and those with 100 to 1,000 bitcoins are showing the strongest accumulation patterns, they said, noting that confirmation will require sustained buying.
" id="body_disclosure--media_disclosure--705401" >On-chain data shows bitcoin buying beneath the surface: Net outflows of funds from spot bitcoin exchange-traded products (ETP) are regaining speed, with the seven-day average hitting the highest level in about a month on Monday. The total since May 1: $8.74 billion. But there are hopeful signs for bulls as bitcoin sits just above its bear market low. Both long-term holders, with positions at least 155 days old, and so-called whales, with at least 1,000 bitcoins, have been buying steadily in recent weeks, though in modest volumes, according to Glassnode data. Their analysts call that "an encouraging sign that conviction is beginning to rebuild beneath the surface." An even more constructive sign is that smaller position holders (those with less than one bitcoin) and those with 100 to 1,000 bitcoins are showing the strongest accumulation patterns, they said, noting that confirmation will require sustained buying.
On the move
- Meta stock gained nearly 9% on Wednesday following the Bloomberg report. Nebius plunged 17% and CoreWeave fell 14% to rank as the Nasdaq's two biggest losers on the day. All three were little changed before the open.
- Rivian Automotive (RIVN) jumped almost 5% in early trading after it raised its 2026 delivery guidance on strong demand for its electric vehicles. It reports second-quarter results July 30.
- Sandisk (SNDK), Micron Technology (MU), Applied Materials (AMAT), and Lam Research (LRCX) all fell about 10% Wednesday as investors took profits following a great run for chip stocks. Intel (INTC) and Marvell (MRVL) both fell about 9%. The PHLX Semiconductor Index (SOX) lost 6.7% after roughly doubling during the second quarter. Sandisk and Micron were both down more than 1% in early trading.
- Oil prices continued to drift lower Wednesday. WTI crude futures (/CL) fell nearly 2% to just above $68 a barrel, just slightly lower than the lowest point on March 2, the first trading day after the start of the Iran war. That put them down nearly 20% over the past two weeks. They fell almost 2% in early trading Thursday, to just about $67.
- Alphabet (GOOGL), the parent company of Google, fell about 1% before the open after a European court upheld Google's antitrust fine of 4.1 billion euros. The fine stems from a 2018 antitrust ruling by the European Commission.
- Drone maker AeroVironment (AVAV) gained more than 5% ahead of the opening bell after the company was awarded a $500 million contract by the U.S. Army.
- June ISM U.S. Manufacturing PMI® came in at 53.3% on Wednesday, slightly below both May's reading of 54% and analysts' expected reading of 53.8%. All readings north of 50% are indicative of expansion, however, and the index hasn't been below this key benchmark since May of last year.
More insights from Schwab
Understanding margin interest: Even if traders don't intend to use margin, there are actions that can trigger margin interest. Read Schwab's guide to margin interest and what types of transactions can lead to unwanted margin loans.
Chart of the day
Data source: Nasdaq. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
After attempting a breakout from a months-long sideways churn, Nvidia shares (NVDA—candlesticks) appear to have formed a topping pattern while falling below an intermediate-term trend line (white line). However, if it turns out to be a false breakdown, shares may move higher quickly as shorts may be forced to cover.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
July 3: U.S. markets closed for Independence Day.
July 6: ISM June Services PMI®.
July 7: No major earnings or data expected.
July 8: FOMC minutes and earnings from Levi Strauss (LEVI).
July 9: June existing home sales and earnings from PepsiCo (PEP).