Thursday's session closed mixed, but the S&P 500 notched another all-time high, driven by strength in the airline sector, solid labor market data, and strong demand for U.S. Treasuries.
Airlines Take Flight: Sector Leads Market Gains
The airline industry was the clear leader of Thursday’s trading session. Delta Air Lines (DAL) surged over 12% after the company raised its full-year profit forecast, citing robust travel demand. Shares of United Airlines (UAL) and American Airlines (AAL) jumped more than 14% and 12%, respectively. Investor sentiment across the sector improved on optimism about sustained profitability and operational momentum.
Labor Market: Weekly Claims Signal Continued Strength
The U.S. Labor Department reported that initial jobless claims dropped by 5,000 to 227,000, marking an 8-week low. The stronger-than-expected data reaffirmed the resilience of the labor market. However, continuing claims rose to 1.965 million, the highest since 2021, suggesting some workers are struggling to find new employment.
Treasuries Rebound: Dovish Fed Comments and Auction Strength
Yields on 10-year Treasury notes ended the day at 4.35%, up 1.8 basis points. The initial selling pressure, triggered by strong labor data and hawkish comments from St. Louis Fed President Alberto Musalem, was offset by a successful $22 billion auction of 30-year bonds, with yields coming in slightly below expectations—indicating healthy demand. Fed San Francisco President Mary Daly helped ease market concerns by reiterating her forecast for two 25-basis-point rate cuts later this year.
Crypto Momentum: Bitcoin Hits Record High Amid Regulatory Optimism
Bitcoin surged over 2% to a new all-time high, boosting the entire crypto-related equity space. Coinbase (COIN) rose over 3%, while MARA, RIOT, and MicroStrategy (MSTR) also advanced. Investors were encouraged by regulatory developments: the U.S. House Financial Services Committee declared the week of July 14 as “Crypto Week”, with hearings scheduled to explore making the U.S. the global hub for digital assets.
Trade Policy Risks Return: Trump’s Tariff Agenda Resurfaces
Former President Donald Trump made headlines again by reaffirming plans to impose 50% tariffs on a range of imported goods, including copper and pharmaceuticals. Trump warned of additional duties—up to 200%—for drug manufacturers that fail to shift production back to the U.S. He also signaled a 10% tariff on Indian goods under the BRICS framework, which he described as a group "designed to harm" the United States.
Earnings Season Preview: Tepid Growth and Sectoral Divergence
According to Bloomberg Intelligence, S&P 500 companies are projected to report just 2.8% year-over-year earnings growth for Q2—the slowest pace in two years. Only 6 of the 11 sectors are expected to post profit growth, reflecting cautious corporate guidance and softening demand across certain industries.
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