Weekly Market and Macro Recap — Week Ending July 4, 2025

Mercury in Leo Fuels Speculation, Tech and Meme Trades Soar

Markets extended their climb this past week, bolstered by a stronger-than-expected labor report, continued risk appetite, and rotation into smaller-cap equities and cyclical sectors. But beneath the headline gains, global economic uncertainties, growing fiscal imbalances, and structural pressures on currencies and labor markets are intensifying. All of this is unfolding amid an astrological backdrop that signals heightened volatility, systemic change, and speculative overtones as the U.S. enters the second half of 2025.

Markets Push Higher Amid Broadening Rally

Equity markets surged across the board in a holiday-shortened week. The S&P 500 gained 1.8%, the NASDAQ rose 1.6%, and the Dow advanced 2.3%, bringing each index within striking distance of record highs. Notably, the small-cap Russell 2000 jumped 3.6%, lifting it into positive territory for the year and up nearly 28% from its April low.

Investor enthusiasm was backed by June’s employment report, which showed the U.S. economy added 147,000 jobs—beating consensus estimates of 117,000. The unemployment rate ticked down to 4.1%, and prior months’ job gains were revised upward, defying the recent pattern of downward revisions. While good news for the real economy, these figures dampened hopes for imminent rate cuts and sent short-term Treasury yields sharply higher.

Interest Rates Climb, Dollar Slides Further

Bond markets reacted quickly to the jobs data. The 2-year Treasury yield spiked to 3.88%, up 20 basis points in one session, while the 10-year closed the week at 4.35%. The yield curve steepened, reflecting diminished expectations for near-term monetary easing. Fixed income returns were broadly flat or negative across duration buckets, with high-yield and convertible bonds faring better.

Despite a brief post-jobs rally, the U.S. dollar remains near two-year lows, down more than 10% year-to-date. Harvard economist Kenneth Rogoff attributes this decline to fiscal excess and policy inconsistency under the current administration. The dollar’s weakness, coupled with resilient equity performance, continues to support gold, which rose 1.8% this week and is now up a remarkable 25.7% year-to-date.