Traders head into the second half of the year with stocks at all-time highs, jobs report pending

CNBC

11 hours ago

Next week kicks off a new trading month as well as the back-half of 2025, and Wall Street will be watching to see if stocks keep up their recent than momentum. Stocks have made a massive comeback after seeing steep declines in early April, when investor anxiety around President Donald Trump's sweeping tariff policy put the S & P 500 near bear market territory . On Friday, the S & P 500 rose to a fresh all-time intraday high , spurred by optimism that trade deals with China and other U.S. trading partners would be announced soon. The three leading indexes are on pace to close out the first half of the year with solid gains. The S & P 500 as well as the Nasdaq Composite are up more than 5% year to date, while the Dow Jones Industrial Average has advanced more than 3%. .SPX YTD mountain S & P 500, year-to-date Yet, some on the Street, such as BlackRock's Rick Rieder, are already projecting that the market could surge even higher in the year's second half. That's because the artificial intelligence revolution could bring down inflation , thereby sending the market higher, he said Wednesday during a keynote speech at the Morningstar Investment Conference. July 'fireworks'? Supporting a sustained rally, the market is also entering a historically strong month. July has been a positive one for the S & P 500 for the last 10 years straight and is the index's best month over the last 20 years, according to Ryan Detrick of the Carson Group. He also noted that July is the best month in a post-election year. "When you're higher in May and June like we're probably going to be with June, because we're up pretty good, July does better, and the final six months of the year have been higher 15 of the last 16 times," the firm's chief market strategist said Thursday on CNBC's " Worldwide Exchange ," noting that his word of the day is "fireworks." "When these weak months are strong, like we're doing right now, that could be a signal this bull market is alive and well." However, others are more skeptical that July will be smooth sailing for the market, seeing that Trump's 90-day tariff pause is set to expire on July 9. While the White House said Thursday that the deadline " is not critical " and that "perhaps it could be extended," the ensuing uncertainty around it could pose a risk. "Elevated macroeconomic and policy uncertainty suggests that equity volatility should remain high in H2, with multiple potential catalysts for volatility such as the July tariff deadlines," Goldman Sachs analyst Andrea Ferrario wrote in a Thursday note. On top of that, current valuation levels could signal the market may be getting ahead of itself. The S & P 500 currently trades at 23.3 times earnings, per FactSet. By comparison, the index's forward price-to-earnings ratio at the peak of the dot-com bubble was at 24.4 times earnings, as said by DataTrek co-founders Nick Colas and Jessica Rabe in a recent post on X . "A bullish call on U.S. large caps therefore requires believing that we can get to 1999-type valuations," they wrote. "The good news is that 2025 has a much more positive setup than 1999 (rate cuts, cheaper oil, greater S & P Tech exposure). Even still, current valuations reflect a full glass of optimism." Jobs on deck At this point, significantly more gains for stocks depend on the U.S. economic environment remaining rather stable, said Anthony Saglimbene, chief market strategist at Ameriprise. That will come especially into view next week. With U.S. markets closed Friday and a shortened trading day Thursday due to Independence Day, a slew of economic data is set to be released Thursday morning, including June's nonfarm payrolls reading. Economists polled by Dow Jones are expecting the report to show 115,000, per FactSet, down from the previous month's reported growth of 139,000 . "I think the most important kind of data to look at right now, and especially since next week we're going to get some of it, is employment," Saglimbene told CNBC. "The only time that consumers really pull back is when they fear they're going to lose their job or they've lost their job, and if we see employment data kind of remain firm, it's unlikely they're going to materially alter their spending, which is a positive for the economy, even with all of this uncertainty around trade and tariffs." Tuesday 9:45 a.m.: S & P Global manufacturing PMI (June) 10 a.m.: ISM Manufacturing (June) 10 a.m.: JOLTS (May) Wednesday 8:15 a.m.: ADP employment report (June) Thursday 8:30 a.m.: Nonfarm payrolls (June) 8:30 a.m.: Initial jobless claims (Week ended June 28) 8:30 a.m.: International trade (May) 9:45 a.m.: S & P Global services PMI (June) 10 a.m.: ISM services (June) 10 a.m.: Factory orders (May) U.S. stock market closes at 1 p.m. Friday U.S. markets closed for Fourth of July holiday