John Hancock: Weekly Market Recap Week Ended July 3
Q2’s rally
As the second quarter concluded on Tuesday, the NASDAQ ended up more than 21% higher for the three-month period while the S&P 500 climbed nearly 15%—the biggest quarterly gains for both indexes since 2020. The Dow added 13%, its best quarter since 2022. The results marked a shift from this year’s first quarter, when the indexes sustained their largest quarterly declines in nearly four years.
Regaining momentum
The latest turn in shifting narratives about AI and semiconductor prospects lifted the major U.S. stock indexes, as each finished around 2% higher for the week on Thursday, before Friday’s pre-holiday market closure. The Dow climbed to a record high, while the S&P 500 and the NASDAQ remained below the peak levels they recorded on June 2.
Jobs setback
U.S. jobs growth fell short of economists’ expectations in June, marking a shift after gains exceeded consensus forecasts in the preceding three months. The economy generated 57,000 new jobs last month—roughly half the total that had been expected—and initial estimates of gains in April and May were adjusted downward by a combined 74,000.
Earnings outlook
Growth expectations remain strong as major U.S. banks prepare to kick off earnings season in mid-July. As of Thursday, analysts were expecting S&P 500 companies to report second-quarter earnings growth of 23.3% on average, according to FactSet. If that proves to be the actual growth rate, it would mark the second consecutive quarter of growth exceeding 20%.
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