U.S. Stock Market Preview | Three major index futures rise together, non-farm payrolls hit tonight! U.S. stocks close early, market closed tomorrow

1. As of July 3rd (Thursday) before the US stock market opens, the three major US stock index futures are all up. As of the time of writing, Dow futures are up 0.07%, S&P 500 index futures are up 0.03%, and Nasdaq futures are up 0.03%.

1. As of the time of writing, the German DAX index is up 0.10%, the UK FTSE 100 index is up 0.41%, the French CAC40 index is down 0.10%, and the Euro Stoxx 50 index is down 0.14%.

1. As of the time of writing, WTI crude oil is down 0.25%, priced at $67.28 per barrel. Brent crude oil is down 0.30%, priced at $68.90 per barrel.

Market News

Trading Reminder: The US stock market will close early today and will be closed tomorrow for one day. Due to the impact of the US Independence Day holiday, the US stock market will be closed on July 4th. The US non-farm payroll report for June will be released early on July 3rd at 20:30, and on that day, trading for US stocks and CME index futures contracts will end early at 01:15 Beijing time on July 4th.

Non-farm payrolls are coming tonight! The impact of Trump’s policies is becoming evident, and the US job market may show “red flags.” As the trade and immigration policies of the Trump administration begin to take effect, forecasters expect the US monthly employment report to show a slowdown in job growth, with the unemployment rate rising to its highest level since 2021. It is reported that the US Department of Labor will release the June non-farm payroll data at 20:30 Beijing time on Thursday, with the market expecting an increase of 106,000 jobs, the lowest increase in four months, compared to an increase of 139,000 in May; the unemployment rate is expected to rise slightly to 4.3%. Thursday's non-farm data may lead Federal Reserve officials to delay interest rate cuts until September, as investors currently expect. However, if signs of a worsening economy appear, the market will increase bets on the Federal Reserve taking action at the upcoming policy meeting on July 29-30.

Goldman Sachs is bearish on the US job market: June non-farm payrolls are expected to increase by only 85,000. Goldman Sachs predicts that the US non-farm payrolls for June will increase by 85,000, a forecast that is far below the market's general expectation of 113,000 and also below the average of 135,000 over the past three months. Goldman Sachs believes that factors dragging down the increase in US non-farm payrolls for June include weak large data indicators, changes in immigration policies, and federal government layoffs. Meanwhile, Goldman Sachs expects the unemployment rate to rise from 4.24% in May to 4.3%, with average hourly wages expected to increase by 0.3% month-on-month. The bank added that the end of worker strikes brought some positive news, but it was not enough to significantly boost the overall data The June non-farm payroll report will confirm that the U.S. labor market is slowing down, which should strengthen the trend of the Federal Reserve gradually shifting to a dovish stance and exert continuous downward pressure on the dollar, especially as wage growth further shows signs of easing inflation.

MAGA's late-night turnaround! Trump lobbied key lawmakers in the early morning, and the House narrowly advanced the tax cut bill. In the early hours of Thursday Eastern Time, House Republicans successfully pushed President Trump's massive tax and spending bill into the final voting process, marking a resolution of the internal divisions within the Republican Party regarding the fiscal impact of the bill. After a day of closed-door negotiations between Capitol Hill and the White House, lawmakers cleared procedural hurdles with a vote of 219 to 213 at 3:30 AM (GMT 7:30 AM), and then resumed debate to prepare for the final vote around 5:30 AM. A procedural vote held on Wednesday lasted seven hours, allowing Trump and House Speaker Mike Johnson time to persuade dissenting party members to support this landmark bill.

Raising the debt ceiling by $5 trillion + cutting benefits, internal Republican divisions hinder the "Great Beautiful" bill. President Donald Trump launched a fierce attack on congressional Republicans via social media on July 3, directly accusing them of delaying the signing of his promoted "Great Beautiful" economic bill and warning that if the bill is defeated, the Republicans will lose the support of the core voters of "Make America Great Again" (MAGA). This intense battle over fiscal policy is pushing the polarization of American politics to new heights. The turmoil stems from serious divisions within the Republican Party over Trump's economic blueprint. Although House Republicans initiated the bill review process on July 2, the voting process became stalled due to a few conservative lawmakers defecting. These fiscal hawks coincidentally aligned with Democrats, both raising strong doubts about the bill's content.

Individual Stock News

Oracle (ORCL.US) $30 billion deal emerges: rumored to expand cooperation with OpenAI to build more data centers. OpenAI has agreed to lease a significant amount of computing resources from Oracle's data centers as part of its "Stargate" project, highlighting the extremely high level of requirements needed to develop cutting-edge AI products. According to insiders, this AI company will lease a total of approximately 4.5 GW of data center power capacity from Oracle, with these power facilities located in the United States. Earlier this week, Oracle announced that it had signed a single cloud service agreement worth $30 billion, which will take effect in fiscal year 2028, but did not disclose the client's name. According to one insider, this "Stargate" agreement is at least part of the disclosed contract.

Starbucks (SBUX.US) offers "sky-high" incentives to push for reform: $6 million stock awards for each executive, but must achieve profitability. Starbucks will implement stock incentives for its executives, with each target reward valued at $6 million—conditional on achieving the company's profitability as soon as possible while also controlling costs. These rewards will be issued in the form of restricted stock units, with the issuance based on the company's performance The company stated in a regulatory filing on Wednesday that these rewards will begin to vest after the end of the company's fiscal year 2027 (which will end around the end of September 2027). These grants are directly linked to whether senior management can quickly implement CEO Brian Niccol's "Back to Starbucks" plan. According to the filing, these awards "include a goal aimed at significantly reducing operating costs to support ongoing investments in the in-store experience."

After weak delivery numbers, Elon Musk takes over sales in the U.S. and Europe for Tesla (TSLA.US). CEO Elon Musk has taken over Tesla's sales operations in Europe and the U.S. after longtime deputy Omead Afshar left the company. Afshar was responsible for Tesla's sales and production operations in North America and Europe before leaving the electric vehicle manufacturer at the end of last month. Following his departure, Musk and Senior Vice President Tom Zhu will each take on different reporting responsibilities, while Tesla is working to recover from several consecutive quarters of declining vehicle deliveries. According to sources familiar with the changes, Zhu, who is currently based in China, will continue to oversee Tesla's sales in Asia and will have full control over global production operations.

Has the "wave of layoffs" in the AI era begun? Microsoft (MSFT.US) initiates a second round of large-scale layoffs, affecting about 9,000 people. Microsoft officially launched its second round of large-scale layoffs for 2025 this week, expected to cut about 9,000 jobs, which is less than 4% of its global workforce. This round of layoffs affects multiple teams, regions, and levels, aiming to streamline processes, reduce management layers, and fulfill the company's commitment to "controlling costs" to Wall Street. According to a Microsoft spokesperson, the sales department and Xbox business line will be the focus of this adjustment. This is the second round of layoffs for Microsoft this year; in May, the company cut 6,000 positions, with the product and engineering teams being the hardest hit. As of the end of June 2024, Microsoft had a total of 228,000 employees, with nearly 20% (45,000 people) in sales and marketing roles.

It is reported that Apple's (AAPL.US) first foldable iPhone has begun prototype testing and is expected to launch in the second half of next year. Apple's first foldable iPhone has begun prototype (P1) testing, and it is expected to enter engineering validation testing (EVT) by the end of this year, with the earliest launch in the second half of next year. The P1 phase generally lasts about two months, mainly to confirm whether the overall appearance, thickness, and weight meet design expectations, as well as to preliminarily test the hinge's folding count and feel. If there are no significant issues, it will move on to the subsequent P2 and P3 phases, gradually improving hardware design and optimizing details such as heat dissipation and antennas. After completing all prototype tests, the product will enter the EVT phase to ensure that the design concept has no major flaws. If everything goes smoothly, design validation (DVT) and production validation (PVT) phases will begin before the end of this year, respectively verifying the completeness and consistency of the overall design and the stability of the process and production line, with mass production expected to begin in 2026

Important Economic Data and Event Forecast

Beijing time 20:30: U.S. June non-farm payrolls change (in ten thousands), U.S. May trade balance (in hundred million USD), U.S. initial jobless claims for the week ending June 28 (in ten thousands).

Beijing time 22:00: U.S. May durable goods orders month-on-month revision (%) , U.S. May factory orders month-on-month (%) , U.S. June ISM non-manufacturing PMI.

The next day, Beijing time 01:00: U.S. total number of active drilling rigs nationwide for the week ending July 4.

Beijing time 23:00: 2027 FOMC voting member, Atlanta Fed President Bostic will speak on U.S. monetary policy.

July 4 - U.S. Independence Day, U.S. - NYSE, NASDAQ will close early at 01:00 Beijing time on July 4