U.S. stock futures edged lower on Friday, July 3, 2026, following a disappointing jobs report that showed weaker-than-expected hiring in June. S&P 500 futures slipped 0.01%, while Nasdaq and Dow contracts also traded in negative territory. The ADP National Employment Report indicated that private employers added only 98,000 jobs last month, falling short of economists' estimates and May's revised tally. The unemployment rate remains near 4.3%, signaling persistent tightness in the labor market despite the slowdown in hiring.
Bond Yields Edge Higher Amid Rate Hike Bets
The 10-year Treasury yield climbed to approximately 4.50% as traders priced in the possibility of additional Federal Reserve rate hikes. The yield move pressured rate-sensitive sectors, particularly banks and real estate investment trusts (REITs). The ISM Manufacturing PMI came in at 53.3, indicating continued expansion in the factory sector, though employment subcomponents showed contraction. Investors are now weighing whether the cooling jobs market could deter the Fed from further tightening, or if inflation concerns will keep the central bank on a hawkish path.
Stock Movers: Moderna, Honeywell, Rivian Lead Gains
Moderna Inc. (MRNA) surged 10.01% after Piper Sandler raised its price target on the biotech firm, citing strong pipeline prospects. Honeywell International Inc. (HON) gained 8.74% following the initiation of analyst coverage by a major investment bank. Rivian Automotive Inc. (RIVN) added 8.44% after the electric vehicle maker issued stronger-than-expected delivery guidance for the third quarter. On the downside, Sandisk Corp. (SNDK) and Teradyne Inc. (TER) both fell more than 13% amid profit-taking and sector rotation out of semiconductor stocks.
Global Markets: Europe Rallies, Asia AI Hardware Surges
European stocks hit fresh records, with the STOXX 600 climbing to an all-time high and heading for its strongest weekly gain in over a month. Cyclical stocks led the advance as traders pushed back expectations for a rapid U.S. rate hike. The FTSE 100 touched its highest level since March, buoyed by gains in utilities and mining shares. SSE PLC rose 2.5%, while Fresnillo PLC jumped over 2%. In Asia, AI hardware stocks surged on rising demand for artificial intelligence chips, with regional suppliers benefiting from the global tech cycle. The rally underscored Asia's central role in the AI supply chain.
Index ETF Performance: Pharma Leads
In the ETF space, the Nippon India Nifty Pharma ETF posted the highest six-month return among index-tracking funds, gaining 11.3% and outperforming its benchmark by 19 basis points over the past year. The fund has delivered a 23.0% compound annual growth rate over three years, according to ACE MF data. The HDFC NIFTY Smallcap 250 ETF followed with a 7.1% return, while the UTI Nifty Next 50 ETF came in third at 3.3%. The rankings only consider funds with assets under management above Rs 1,500 crore.
Outlook: Data and Earnings in Focus
Market participants are now looking ahead to upcoming U.S. services sector data and earnings reports from major companies. The Federal Reserve's next policy decision remains a key driver, with the jobs data adding to uncertainty about the pace of rate normalization. With U.S. markets closed on July 3 for the Independence Day holiday, trading volumes were subdued. Investors are also monitoring economic releases from Europe, Japan, and Canada for further directional cues.
