4 July 2025,03:22
Daily Market Analysis
4 July 2025, 03:22
Key Takeaways:
*The S&P 500 and Nasdaq extended their record-breaking rally, with the Nasdaq rising over 1%, fueled by a sharp rally in Nvidia.
*NFP increased by 147,000, surpassing expectations and reinforcing confidence in the resilience of the U.S. economy.
* Investors remain cautious ahead of the expiration of the 90-day tariff pause, which could spark renewed trade tensions and inject volatility into markets.
Market Summary:
Wall Street extended its record-breaking rally in a shortened session ahead of the U.S. Independence Day holiday, with both the S&P 500 and Nasdaq notching fresh all-time highs. The tech-heavy Nasdaq led gains, rising over 1%, driven by a surge in semiconductor giant Nvidia, whose market capitalization is now within striking distance of the $4 trillion mark.
Investor sentiment was buoyed by signs of resilience in the U.S. labor market. Nonfarm payrolls rose by 147,000 in the latest reading, significantly outperforming market expectations and reinforcing confidence in the underlying strength of the U.S. economy. The risk-on mood was further supported by political clarity after the much-debated “Big and Beautiful” tax cut bill cleared the House of Representatives and now awaits President Trump’s executive sign-off. The bill, expected to take effect within days, has sparked optimism over economic stimulus but simultaneously raised concerns over long-term fiscal sustainability, as it could add more than $3 trillion to the U.S. sovereign debt over the next decade.
While the bullish momentum remains intact, market participants are bracing for fresh headwinds once trading resumes after the holiday. The expiration of the 90-day tariff pause—part of President Trump’s sweeping trade policy—looms large, with the administration signaling a tough stance on negotiations with key partners including the UK, the Eurozone, and China. Failure to reach agreements by the deadline could trigger a new wave of tariffs, potentially disrupting global trade flows and casting a shadow over the equity market’s recent rally.
For now, Wall Street maintains its upward trajectory, but tariff uncertainty could inject fresh volatility into the market in the weeks ahead.
The tech-heavy Nasdaq continued its relentless bullish rally, setting yet another all-time high in the last session after surging by more than 200 points. The index has carved out a solid uptrend, finding firm support near the 22,400 mark before rebounding sharply and pushing into uncharted territory, underscoring a strong bullish bias.
Momentum indicators further reinforce the bullish narrative. The Relative Strength Index (RSI) has entered overbought territory, reflecting the strength of the current rally, while the MACD continues to edge higher, signaling that upward momentum remains firmly intact.
However, with the RSI signaling overbought conditions, the risk of a near-term technical retracement is rising. Traders are advised to remain cautious and watch for potential pullbacks as the index consolidates after its recent explosive gains.
While the broader trend remains positive, a corrective move cannot be ruled out in the short term.
Resistance levels: 22, 870.00, 23,080.00
Support levels: 22,680.00, 22,400.00
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