Stock Market Fireworks
By Crest Capital Advisors on July 6, 2026
Dow: 1.97% to 52,900.07
S&P 500: 1.76% to 7,483.24
Nasdaq: 2.12% to 25,832.67
Russell 2000: (0.46%) to 2,996.11
Bitcoin: 61,506
10 Year Yield: 4.49%
Outperformers: Financial 3.73%, Communication Services 3.28%, Consumer Discretionary 2.55%
Underperformers: Real Estate (1.28%), Energy (1.13%)
Despite several moving pieces, the market logged solid gains for the shortened week heading into July 4th. Multiple headlines are impacting the market currently, with the momentum unwind in focus again (memory/semis hit by AI Capex pushback), a weak jobs report easing pressure from rate hike fears, the Mag 7 bouncing back after coming under pressure in June (Apple and Meta leading the group), and oil continuing to decline despite continued flare-ups in the Middle East.
As we turn our focus to the second half of the year, we can’t help but reflect on the strong performance for Q2 – with the S&P 500 delivering its 12th best quarter since 1950 (+ 14.9%) and the 8th best showing for the Russell 2000 since inception (+21.2%). Historically, every other quarterly observation for S&P 500 performance above this current period has generated a positive forward return in the 1 and 2 quarters following.
Despite the high earnings expectations, breadth in the market continues to expand – with 65% of the stocks in the S&P 500 trading above their respective 200-day moving averages (up from 52% in May). Recent pullbacks in the S&P remain rotational, with short-term weakness giving way to other strong performers.
Mixed Bag Employment
The June employment report gave markets a mixed but ultimately dovish signal. Nonfarm payrolls increased by 57,000, well below consensus expectations of roughly 113,000, while April and May payrolls were revised lower by a combined 74,000 jobs. At the same time, the unemployment rate fell to 4.2%, though much of the decline was driven by a sharp drop in labor force participation, which fell to 61.5%, the lowest level since 2021. Wage growth remained firm, with average hourly earnings rising 0.3% month-over-month and 3.5% year-over-year, suggesting that labor demand has cooled but has not collapsed.
Market participants are interpreting the report as evidence that the labor market continues to slow, but not enough to signal an imminent recession or macroeconomic weakness. Hiring remains concentrated in professional services, healthcare, and social assistance, while leisure and hospitality unexpectedly shed jobs. Crest Capital’s research partners, like TrendMacro, argue that payroll growth near 75,000 may now represent a reasonable demographic baseline for a lower-immigration economy, implying that today’s headline miss may not be as worthy of sounding any slowdown alarms. Broader labor-market indicators remain mixed, with job-finding rates stable, layoffs subdued, and aggregate hours worked continuing to expand modestly.
For market participants, the key takeaway is that today’s report modestly reduces concerns about the Federal Reserve needing to tighten policy further. Markets trimmed rate-hike expectations following the release, as weaker hiring and lower labor force participation reinforced the narrative of a gradually cooling economy. While the data does not definitively change the Fed’s outlook, it shifts the focus toward upcoming inflation reports, which will likely determine whether policymakers view the recent softening in employment as sufficient evidence that inflation pressures are continuing to ease.
Happy 250th, America!
As we say happy birthday to America, we at CMD like to take some time to reflect on how far this country has come since that fateful day on July 4th, 1776. We hope you enjoy these facts about how much has changed since then!
The economy then and now. The United States began as an agrarian economy where about 90% of people farmed. Today under 2% farm, and one U.S. farm feeds roughly 169 people. The country is now the world’s largest economy at about $32.4 trillion, producing close to 26% of global output with under 4% of the world’s population.
Living standards compounded slowly. Real GDP per capita rose 21.7-fold between 1820 and 1998, an average of just 1.73% a year. The lesson for investors is the arithmetic of patience: a modest real growth rate compounded for two centuries builds a $32 trillion economy.
The dollar was stable, then it was not. A 1776 dollar is worth about $38 today. Almost none of that came early. Total inflation from 1774 to 1900 was roughly 4%, while prices rose more than 3,800% after 1900. Nearly all U.S. inflation followed the creation of the Federal Reserve in 1913 and the end of the gold link in 1971. A dollar now buys about 2.6% of what it bought in 1776.
Wall Street is nearly as old as the republic. The Buttonwood Agreement that became the New York Stock Exchange was signed by 24 brokers in 1792, the same year the Coinage Act formally established the dollar.
The Dow’s starting line. The Dow Jones Industrial Average launched on May 26, 1896 at 40.94 points with 12 companies. It now trades in the tens of thousands.
Equities over the very long run. One dollar invested in U.S. stocks in 1802, with dividends reinvested, grew to roughly $13.5 million by 2012, a real return near 6.6% a year that has held with striking consistency across wars, depressions, and crashes.
Why owners beat lenders and savers. Over about 210 years, one 1802 dollar grew in real terms to roughly $700,000 in stocks, $1,178 in bonds, $281 in Treasury bills, $4.52 in gold, and about a nickel in cash. That single comparison is the case for equities in one line.
One credible caveat. Recent research by Edward McQuarrie, discussed by the CFA Institute, argues the pre-1870 stock data carries survivorship bias and that bonds actually outperformed stocks in some early periods. The long-run equity story is directionally sound but a bit cleaner in the retelling than in the raw data.
Crazy Stat(s) of the Week
- As of July 3rd, 4,495 ETFs are actively trading in the US.
Quote of the Week
“In the truest sense, freedom cannot be bestowed; it must be achieved.”
– Franklin D. Roosevelt
Calendar of Events to Watch for the Week of July 6th
Following the holiday-shortened week, the economic calendar remains relatively light.
Stay safe, enjoy the festivities/barbecues/fireworks, and the celebration of sport and the world coming together as the World Cup advances to the knockout rounds. It’s been an incredible event/tournament so far and the stakes ratchet up significantly next week! Happy 4th of July all!
Monday 7/6 – ISM Services Index and S&P Global U.S. Services PMI for June will be released – investors will be watching for employment, business activity, and prices-paid components.
Tuesday 7/7 – US May Trade Balance – Reports the difference between U.S. exports and imports. A larger deficit can weigh on GDP growth, while a narrowing deficit may provide support.
Wednesday 7/8 – FOMC Minutes (June) – Detailed notes from the Federal Reserve’s June policy meeting. Investors will look for clues regarding inflation concerns, economic outlook, and the timing of future interest rate moves.
Thursday 7/9 – Initial Jobless Claims – Weekly measure of new unemployment benefit applications. One of the timeliest indicators of labor market strength.
Friday 7/10 – No major economic releases scheduled.
Source: MarketWatch / FactSet (July 2, 2026)
