US markets gain on strong jobs data & tax bill amid looming tariff deadline

Stronger employment data and tax cut bill lift markets

United States (US) stock markets ended a holiday-shortened week on a strong note, supported by stronger-than-expected employment data and the House of Representatives' approval of the One Big Beautiful Bill (OBBB), which President Donald Trump has since signed into law.

For the week, the small-cap Russell 2000, which is highly leveraged to domestic economic conditions such as interest rates and employment, surged 3.52%. Wall Street gained 1009 points to 27,230 (+2.30%), the US 500 (S&P 500) added 1.72%, and the US Tech 100 (Nasdaq 100) finished 1.48% higher.

US equity markets begin this week under a cloud of uncertainty ahead of the 9 July deadline for reciprocal tariffs. President Trump announced last week that the White House would send letters to countries specifying tariff rates on goods imported to the US.

Twelve countries targeted in first tariff wave

President Trump has now confirmed that the first batch of tariff letters, signed for 12 countries, will be sent out today, Monday, 7 July 2025. These 'take it or leave it' letters outline specific tariff rates on goods exported to the US, effective from 1 August 2025.

Trump declined to name the 12 countries, stating the list would be revealed today. Based on recent developments, the following countries and regions are likely candidates: the European Union, Japan, India, South Korea, Taiwan, Brazil, Thailand, Indonesia, Turkey, Malaysia, Colombia, and South Africa.

Canada and Mexico have not been included due to protections under the United States–Mexico–Canada Agreement (USMCA), their relatively low tariffs on US goods, and their strategic importance as North American partners.

Market impact expected to be mild

Assuming the 12 countries receive tariffs in the 20 - 30% range, and considering exclusions and a 10% baseline tariff applied to other countries likely to receive letters at a later date, the average tariff rate is estimated to increase from approximately 14 - 15% to around 18% by 1 August 2025.

This rise in the average tariff level is unlikely to significantly disrupt markets on its own, assuming no major retaliatory tariffs from the affected countries. Additionally, optimism stemming from the One Big Beautiful Bill tax cut, stronger-than-expected employment data, and anticipation of second-quarter (Q2) earnings may help offset potential negative impacts.

FOMC minutes and jobless claims in focus this week

Looking ahead, the economic calendar is relatively light this week. Market focus is likely to shift to the Federal Open Market Committee (FOMC) meeting minutes, which are expected to reiterate the US Federal Reserve's  (Fed's) 'wait and see' stance. Weekly initial jobless claims data will also attract attention.

The rates market is currently pricing in 18 basis points (bp) of interest rate cuts for the September FOMC meeting, with a cumulative 55 bp of cuts priced in between now and the end of 2025.

US Tech 100 technical analysis

Following the US Tech 100’s strong rally on 12 May, we have maintained the view that the advance from the 21 April low of 17,592 is a Wave III according  Elliott Wave Theory. This should be followed by a Wave IV pullback.

The rebound in late June from our key 21,500 - 21,450 support zone created room for the US Tech 100 to reach record highs, with Wave III extending toward weekly trend channel resistance around 22,300.

A sustained break below short-term support at 22,000 would suggest that Wave III is complete and a Wave IV corrective move is underway.

US Tech 100 daily chart

US 500 technical analysis

Following the US 500's surge on 12 May, we continue to hold the view that the rally from the 21 April low of 5101 represents a Wave III advance, which should soon be followed by a Wave IV pullback.

The late-June rebound from our key 5950 - 5920 support zone has allowed the US 500 to push to new highs. This suggests Wave III is extending toward 6350, and that the anticipated Wave IV correction has been delayed once again.

US 500 daily chart

• _{Source: TradingView. The figures stated are as of 7 July 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}