OPENING CALL
Stock futures pointed to a mixed open on the last trading day of the week before the July 4 holiday, as Wednesday's slide in tech stocks extended
into Asia and Europe on Thursday.
Ahead of the opening bell, the Dow and the S&P 500 were mostly flat while the Nasdaq was in negative territory
Going into the long weekend, investor focus will be on the June employment report, but Barclays cautioned that the data risk being distorted
by FIFA World Cup-related temporary hiring.
It added investors were likely to place greater weight on the June CPI report on July 14, saying inflation data will offer a cleaner read on the economy.
"Today's nonfarm payrolls report for June will be important in assessing the prospect of Fed rate hikes this year," MUFG Bank said.
Capital Economics said it believes the economic data will remain strong and clear a way for the Federal Reserve to hike interest rates three times
in 2027. Capital Economics thinks that these hikes would be unwound in 2028.
Market Insight
Artificial intelligence earnings could start to fall short of expectations
and undermine both equity prices and the boom in capital expenditure, Capital Economics said. It added that equity prices may rise further in the near term but will eventually pull back. It estimates the S&P 500 could fall to 6500 by end-2027.
Economic Insight
In the wake of the European Central Bank's forum in Portugal this week, Tickmill Group said that central banks' forward guidance was effectively dead .
Federal Reserve Chairman Warsh is trendsetter on this front, while ECB President Lagarde, Bank of England Governor Bailey and Bank of Canada Governor Macklem "all appeared comfortable moving further away from pre-commitment."
Stocks to Watch
Alphabet was down 1.5%. Earlier Google lost a fight
against a $4.7 Billion fine from the EU.
Bending Spoons declined 3.5% after the company ended its first trading day
up 40%.
Micron Technologies fell 1.9% and Nvidia edged nearly 1% lower as a global sell off in AI continued.
Strategy shares gained 5.7%. The company earlier this week
unveiled a plan aimed at shoring up confidence.
Watch For:
U.S. Weekly Jobless Claims, U.S. Employment Report for June
Today's Top Headlines/Must Reads:
- Big Brewers Are Making an Outsize Bet on Tiny Cans of Beer
- Why Medicare Isn't a Game Changer for Weight-Loss Drugmakers
- Europe Learns It's Hard to Start a Trade War With China During a Heat Wave
MARKET WRAPS
Forex:
The dollar extended losses
to reach a nine-day low against a basket of currencies as investors trim bets on the Fed raising interest rates.
The euro fell
to a one-year low against the pound, but ING said that sterling's gains could prove temporary as focus turns to who will be appointed the U.K.'s treasury chief.
"The U.K. fiscal straitjacket very much limits room for manoeuvre, and it is hard to see any major spending plans coming through without tax rises."
The euro
edged higher against the dollar but it could extend recent losses in coming weeks before recovering later in the year, ING said. The euro could attempt to break below $1.1300 in the near term if the market shifts towards pricing 50 basis points of U.S. rate rises this year.
"But based on a house view that the Federal Reserve does not hike, we are looking for the euro to trade back into the $1.16-$1.18 range into November/December."
The dollar-yen currency pair
could potentially hit 170 or higher in the long term if Japan doesn't meaningfully change its monetary-policy stance, RBC BlueBay Asset Management said.
Bitcoin recovered
after Fed Chair Kevin Warsh said inflationary risks have eased at the European Central Bank's forum in Portugal on Wednesday, prompting investors to price out the chance of an interest-rate rise in July, according to Deutsche Bank.
Bonds:
Treasury yields rose across maturities
as economic data remained solid. Thursday's focus will be on the June employment data.
"An outcome around expectations--and note that the outcome has surprised on the upside over the past three months--means that the Federal Reserve can continue to set the inflation target ahead of the employment target, " SEB said.
The Treasury yield curve has flattened over recent weeks
despite an offsetting fall in inflation expectations, and could even invert, according to Capital Economics.
"We wouldn't be surprised if this curve inverted, but we don't think a U.S. recession is likely."
The outlook for government bonds
has improved amid easing geopolitical tensions and falling energy prices. The Investment Institute by UniCredit said, reckoning that the cautious stance of central banks is likely to prevent a significant decline in yields.
Energy:
Oil prices fell
1% on signs of progress in indirect U.S.-Iran negotiations.
"Oil prices are likely to remain under downward pressure as supply continues to normalize and geopolitical risk premiums unwind, although setbacks in negotiations or renewed security incidents could still trigger periods of volatility," MUFG said.
European natural-gas prices
climbed on concerns over regional storage levels and lingering uncertainty over LNG supplies from the Persian Gulf.
Metals:
Gold prices initially ticked higher
after Fed Chair Warsh's less-hawkish-than-expected message, but later declined.
"Gold could find near-term support if expectations for additional rate hikes continue to soften, although persistent inflation and a resilient U.S. economy are likely to limit upside potential," MUFG said.
Copper and base metals edged lower . Investor appetite was affected by a stronger dollar, and the market is waiting for the U.S. to review refined copper imports.
TODAY'S TOP HEADLINES
SpaceX Showed Investors Prototype of Elon Musk's New AI Device
Elon Musk's SpaceX has developed a prototype for a handset-like device designed to reshape how humans interact with artificial intelligence that SpaceX has shown investors recently.
The rocket and AI company showed the prototype, which features a sleek design that is slimmer than an iPhone, to some investors and other stakeholders ahead of the company's mega initial public offering, according to people familiar with the matter.
The Anthropic Fable Ban Is Over. The Battle Over How to Tame AI Has Just Begun.
SAN FRANCISCO-Like much of the tech world, startup founder Quinn Slack was riled up.
It was just hours after the Trump administration on Tuesday said it was lifting its weekslong export ban on Anthropic's powerful artificial-intelligence model dubbed Fable. But the reversal had done little to ease Slack's fears about government control over AI.
Roche Lung-Cancer Drug Candidate Beats Existing Therapies in Late-Stage Trial
Roche Holding said a drug candidate showed better potential than existing therapies in a late-stage study with patients with a type of advanced lung cancer who had been previously treated.
The Swiss drugmaker said Thursday that its experimental drug, divarasib, met its primary and key secondary objectives in a head-to-head clinical trial that compared it against approved treatments Amgen's Lumakras and Mirati Therapeutics's Krazati.
Takeda, InSilico Strike AI Drug-Discovery Deal Worth Up to $600 Million
Japanese pharmaceutical major Takeda is forging an AI drug-discovery partnership with biotech firm InSilico with a potential initial value of $600.0 million.
Under the partnership announced Thursday, Takeda will pay InSilico to use its proprietary Pharma. AI platform to advance drug candidates across several therapeutic areas. InSilico will lead drug discovery, while Takeda will further development, including advancing candidates past clinical trials.
Warsh Says Inflation Outlook Has Improved but Won't Say if Fed Should Hike Rates
Federal Reserve Chairman Kevin Warsh declined to say Wednesday whether the central bank needed to consider a rate increase later this month but said his first weeks in the job have seen risks of higher inflation recede. That was evidence, he said, that markets have already grasped his hard line on prices.
"Expectations of future inflation [over the last four weeks] have come down. Inflation risks have come down," Warsh said at a conference in Portugal alongside foreign counterparts. Anyone expecting the Fed would tolerate inflation running above its 2% goal "would be disappointed," he added.
Is the U.S. jobs market getting better? June employment report to give us a heat check.
Is it getting easier to find a job? Are businesses really hiring more workers? That's what the official data statistics tell us, but Americans aren't so sure.
The number of new jobs created in June will provide more answers. Here's what to watch on Thursday, when the employment report is released a day early due to the July 4 holiday.
U.S. Plunges Trade Pact With Canada and Mexico Into Doubt
The U.S. declined to extend its signature trade pact with Mexico and Canada on Wednesday, setting up a decadelong review process that casts uncertainty over businesses that move goods across the world's busiest export borders.
The U.S. decision came as no surprise. President Trump has effectively ripped up parts of the U.S.-Mexico-Canada trade agreement that he signed in his first administration, imposing tariffs on a range of goods. He has mused about terminating the agreement altogether.
Michael Burry Cites 'Beginning of the End' With New AI Short Bets
Michael Burry's big short on AI just got a whole lot bigger.
Tesla, Caterpillar, semiconductor manufacturer Applied Materials and an ETF tracking chip makers are among the latest bearish bets announced by Burry, one of the heroes of Michael Lewis's financial-crisis saga, "The Big Short."
Trump Pledged No Forever Wars. Now He Risks Forever Talks With Iran.
President Trump came to office promising an end to forever wars. He now finds himself bogged down in talks with Iran with no end in sight.
It is a stalemate that favors Tehran's well-worn playbook of drawing out negotiations and putting off any concessions that cross its redlines, geopolitical analysts said.
Massive Russian Strikes Pound Ukraine's Capital
Russian missiles and drones pounded Kyiv and other Ukrainian cities overnight and early Thursday morning, killing at least 13 people and wounding more than 80, according to Ukrainian officials.
Kyiv bore the brunt, with ballistic and cruise missiles as well as waves of drones hitting the capital over several hours. The strikes caused fires at a hotel and several residential buildings, including one nine-story building where six stories were destroyed. City officials said people were trapped inside.
U.S. Death Rate Falls to Its Lowest Point on Record
The U.S. overall death rate in 2025 fell to its lowest point on record, even as influenza and pneumonia are now among the nation's top 10 causes of death for the first time in years, according to new data from the Centers for Disease Control and Prevention.
The death rate fell 4.6% last year, to 689.2 deaths per 100,000 people, down from 722.1 in 2024, according to the CDC's National Center for Health Statistics. The death rate declined across every age group and nearly every demographic group tracked in the provisional report.
Write to pierre.bertrand@wsj.com
TODAY IN CANADA
Earnings:
Nothing major scheduled
Economic Indicators $(ET)$:
0930 Canada Manufacturing PMI data for July
Stocks to Watch:
Takeda Pharmaceutical, InSilico Medicine Strike AI Drug-Discovery Deal Worth Up to $600.0M, Sources Say; InSilico to Receive $60 Mln in Upfront, Near-Term Payments, Sources Say; InSilico Eligible for Milestone Payments, Tiered Royalties on Future Sales, Sources Say
Expected Major Events for Thursday
06:00/JPN: May Revised Machine Tool Orders
08:00/ITA: May Unemployment
08:30/UK: 2Q Bank of England Credit Conditions Survey
08:30/UK: 2Q Bank of England Bank Liabilities Survey
12:30/US: 06/27 Unemployment Insurance Weekly Claims Report - Initial Claims
12:30/US: Jun U.S. Employment Report
13:00/RUS: Weekly International Reserves
13:30/CAN: Jun Canada Manufacturing PMI
14:00/US: May Manufacturers' Shipments, Inventories & Orders (M3)
14:30/US: 06/26 EIA Weekly Natural Gas Storage Report
20:30/US: Foreign Central Bank Holdings
20:30/US: Federal Discount Window Borrowings
All times in GMT. Powered by Onclusive and Dow Jones.
Expected Earnings for Thursday
America's Car-Mart Inc $(CRMT)$ is expected to report $-0.66 for 4Q.
Lindsay Corp (LNN) is expected to report $1.14 for 3Q.
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ANALYST RATINGS ACTIONS
Advanced Energy Raised to Overweight From Equal-Weight by Wells Fargo
Ameris Bancorp Cut to Market Perform From Outperform by Raymond James
BOK Financial Cut to Market Perform From Outperform by Raymond James
Carter Bankshares Cut to Market Perform From Outperform by Raymond James
Circle Internet Group Raised to Neutral From Sell by Compass Point
ConnectOne Bancorp Cut to Market Perform From Strong Buy by Raymond James
Cullen/Frost Bankers Cut to Market Perform From Outperform by Raymond James
CVB Financial Raised to Outperform From Market Perform by Raymond James
Dow Cut to Sector Perform From Outperform by RBC Capital
FirstSun Capital Bancorp Raised to Strong Buy From Outperform by Raymond James
Fox Corp. Raised to Outperform From Peer Perform by Wolfe Research
Grindr Raised to Overweight From Equal-Weight by Morgan Stanley
Lockheed Martin Raised to Buy From Neutral by Citigroup
Merchants Bancorp Cut to Market Perform From Outperform by Raymond James
Murphy USA Raised to Buy From Hold by Jefferies
Old Dominion Freight Raised to Outperform From In-Line by Evercore ISI Group
Prog Holdings Cut to Hold From Buy by Loop Capital
Saia Raised to Outperform From In-Line by Evercore ISI Group
Salesforce Raised to Buy From Neutral by Guggenheim
ServiceNow Raised to Buy From Neutral by Guggenheim
Simon Property Cut to Peer Perform From Outperform by Wolfe Research
Talos Energy Raised to Buy From Neutral by Roth Capital
Truist Financial Cut to Market Perform From Outperform by Raymond James
Werner Enterprises Raised to In-Line From Underperform by Evercore ISI Group
XPO Raised to Outperform From In-Line by Evercore ISI Group
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
July 02, 2026 06:10 ET (10:10 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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