U.S. financial markets will remain closed on Friday for the Independence Day holiday, but futures pointed to a firmer start when trading resumes. Softer-than-expected U.S. employment figures reduced expectations of an imminent Federal Reserve rate increase, helping Asian equities recover after recent losses. Investors also monitored gains among Tesla’s (NASDAQ:TSLA) Chinese suppliers and stronger-than-forecast activity in China’s services sector.
Softer payrolls ease pressure on the Federal Reserve
Wall Street futures strengthened after June’s labour market report suggested the U.S. economy is cooling, reducing expectations that policymakers will tighten monetary policy later this month.
At 03:11 ET (07:11 GMT), Dow Jones futures were up 148 points, or 0.3%, S&P 500 futures had gained 30 points, or 0.4%, while Nasdaq 100 futures advanced 278 points, or 0.9%.
The major U.S. indices ended Thursday’s shortened trading week with mixed performances. Treasury markets were relatively stable, with benchmark 10-year yields holding steady while two-year yields edged slightly lower.
The latest Labour Department figures showed that job creation slowed more than economists had expected in June. Although the unemployment rate fell to a one-year low of 4.2%, investors interpreted the report as reducing the likelihood of another immediate interest rate increase. Earlier comments from Federal Reserve Chair Kevin Warsh, who suggested inflation risks had eased, reinforced that view.
Deutsche Bank analysts noted that market-implied odds of a July rate hike dropped from 34% on Tuesday to just 18% by Thursday’s close.
“Moreover, just 30 [basis points] of hikes are now priced in by the December meeting, the fewest since the Fed meeting a couple of weeks ago when the dot plot surprised in a hawkish direction,” they added.
Technology stocks lead Asian rebound
Asian stock markets posted broad gains as investors returned to technology shares following heavy selling earlier in the week.
Semiconductor companies led the advance after concerns over artificial intelligence infrastructure spending had previously triggered widespread profit-taking.
Samsung Electronics was among the session’s strongest performers after reports that Anthropic, the developer behind Claude Code, is considering developing its own AI processor with the South Korean chipmaker.
The positive news helped South Korea’s KOSPI recover after two consecutive declines, while Japan’s Nikkei 225 and Singapore’s STI also closed higher.
Chinese Tesla suppliers jump after delivery surprise
Shares in several Chinese suppliers to Tesla (NASDAQ:TSLA) rose sharply after the electric vehicle manufacturer reported stronger-than-expected second-quarter deliveries, improving confidence that demand may be stabilising.
Auto component manufacturers Ningbo Xusheng, Ningbo Tuopu and Zhejiang Sanhua all gained between 5% and 9%.
Tesla delivered a record 480,126 vehicles during the quarter, supported by robust European demand and modest sales growth in China.
The launch of lower-priced Model 3 and Model Y variants, together with the refreshed Model Y, helped maintain sales momentum and reinforced China’s importance as both a manufacturing base and a major end market for Tesla.
China’s services economy remains resilient
China’s services sector expanded faster than expected in June, according to the latest private-sector survey.
The RatingDog Services PMI eased slightly to 54.1 from 54.4 in May but remained comfortably ahead of market expectations of 53.0.
With the index remaining above the 50-point threshold since January 2023, the survey continued to point to sustained expansion across the sector.
Demand strengthened both domestically and internationally, while exports of services grew at their fastest pace since October 2024.
Businesses also increased selling prices for the first time in four months as higher input costs, linked partly to supply disruptions in the Middle East, filtered through to customers.
Hormuz transit fees remain under consideration
Bloomberg News reported that some European policymakers are increasingly accepting that commercial vessels may eventually have to pay transit fees to Iran and Oman to pass through the Strait of Hormuz.
People familiar with the discussions said some Gulf Arab officials also believe a service charge is likely to emerge, although no government has formally adopted that position.
Questions remain over both the size of any future fees and the implications such charges could have for international maritime law.
The Strait of Hormuz has remained at the centre of geopolitical tensions since Iran effectively closed the shipping route following the joint U.S.-Israeli military operation in late February. Although oil prices initially surged, they have since retreated to around pre-conflict levels after the United States and Iran reached an interim peace agreement.
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