Market Wrap US-Europe 2 July: Dow Hits a Record and Europe Rallies as Soft US Jobs Data Reset Rate Expectations
US stocks ended mixed while European markets rallied strongly on Thursday after a much weaker than expected US jobs report reduced expectations of a near term Federal Reserve rate increase, sending the Dow Jones Industrial Average to a record close even as technology shares extended their selloff. US markets are closed on Friday 3 July for the Independence Day holiday, making Thursday the final session of the week.
The Bureau of Labor Statistics reported that US employers added just 57,000 jobs in June, roughly half the pace markets had expected, with May revised down to 129,000. The unemployment rate edged down to 4.2 percent, but the improvement came largely from a 0.3 point drop in labour force participation to 61.5 percent rather than stronger hiring, while average hourly earnings rose 0.3 percent on the month and 3.5 percent on the year. The soft print reduced expectations of a near term rate increase and triggered a clear rotation within US equities.
On Wall Street, the Dow jumped 1.14 percent, or 594.83 points, to a record 52,900.07, led by rate sensitive and value names, while the S&P 500 ended flat at 7,483.24, adding less than a point. The Nasdaq Composite fell 0.80 percent to 25,832.67 as the selloff in semiconductor and AI linked shares extended for a second day, pressured by concerns over AI computing oversupply after Meta said it would begin selling excess computing capacity.
European markets rallied strongly on the easier US rate signal. Germany’s DAX led with a 2.16 percent gain to 25,580.88, while the UK’s FTSE 100 rose 1.67 percent to 10,652.87, an over two month high supported by defence stocks. France’s CAC 40 climbed 1.65 percent to 8,474.86 and the Euro Stoxx 50 added 1.24 percent to 6,360.47.
In rates and currencies, the US 10 year Treasury yield ended the shortened pre holiday bond session little changed near 4.49 percent, having dipped after the jobs data. The dollar weakened across the board: the euro rose 0.47 percent to 1.1430, sterling gained 0.57 percent to 1.3346, and the yen firmed 0.92 percent to 161.09 per dollar, rebounding from multi decade lows. The Egyptian pound was steady at 49.04 per dollar and the Kuwaiti dinar held at 0.3079 under its basket peg. Bitcoin rose 2.50 percent to about 61,457, and the VIX volatility index eased 2.65 percent to 16.15.
Earlier in the day, MENA and Asian markets were mixed. Hong Kong’s Hang Seng rose 0.76 percent to 23,055.03 as it reopened after a holiday, while Abu Dhabi’s FTSE ADX General added 0.22 percent to 9,809.64 and Oman’s MSX 30 gained 0.19 percent to 7,575.22. Kuwait’s Premier Market held broadly steady at 9,092.64, down just 0.07 percent, while Saudi Arabia’s TASI eased 0.28 percent to 10,826.98, Dubai’s DFM slipped 0.32 percent to 5,990.59, Bahrain’s All Share edged down 0.21 percent to 2,035.66 and Qatar’s QE Index fell 0.77 percent, or 79.66 points, to 10,211.16 on weakness in banks. Japan’s Nikkei dropped 2.47 percent, or 1,741.81 points, to 68,733.15 as the global chip selloff hit Tokyo, and the Shanghai Composite lost 2.03 percent to 4,028.90. Egypt’s market was closed for the 30 June Revolution holiday.
Why it matters: The jobs report changes the near term policy calculus without settling it. Payrolls growth of 57,000 is half the expected pace, but a 4.2 percent unemployment rate driven by falling participation and wage growth of 3.5 percent give the Federal Reserve reasons to stay cautious rather than reverse course. For the Gulf, any easing in US tightening pressure flows directly through the dollar pegs into regional funding costs and liquidity, while a softer dollar supports commodity prices and eases import bills across the wider region. The rotation from technology into value also matters for regional investors with heavy exposure to US large cap tech.
Outlook: With US markets closed on Friday, attention shifts to the late July Federal Reserve meeting and the next inflation readings, which will determine whether the soft jobs print marks the start of a cooling trend or a one month wobble. In the region, the OPEC+ meeting on 5 July on August production levels is the next catalyst for oil linked assets, while Gulf markets reopen Sunday and Egypt resumes trading after the holiday.
US and Europe equities, ranked highest to lowest
| Index | Close | Change |
| Germany DAX | 25,580.88 | +2.16% |
| UK FTSE 100 | 10,652.87 | +1.67% |
| France CAC 40 | 8,474.86 | +1.65% |
| Euro Stoxx 50 | 6,360.47 | +1.24% |
| Dow Jones | 52,900.07 | +1.14% |
| S&P 500 | 7,483.24 | 0.00% |
| Nasdaq Composite | 25,832.67 | -0.80% |
US markets are closed Friday 3 July for the Independence Day holiday.
MENA and Asia equities, ranked highest to lowest
| Index | Close | Change |
| Hong Kong Hang Seng | 23,055.03 | +0.76% |
| Abu Dhabi FTSE ADX General | 9,809.64 | +0.22% |
| Oman MSX 30 | 7,575.22 | +0.19% |
| Kuwait Premier Market | 9,092.64 | -0.07% |
| Bahrain All Share | 2,035.66 | -0.21% |
| Saudi Arabia TASI | 10,826.98 | -0.28% |
| Dubai DFM General | 5,990.59 | -0.32% |
| Qatar QE Index | 10,211.16 | -0.77% |
| Shanghai Composite | 4,028.90 | -2.03% |
| Japan Nikkei 225 | 68,733.15 | -2.47% |
Egypt’s EGX was closed Thursday for the 30 June Revolution holiday; trading resumes Sunday. Last close: EGX 30 at 50,532.70 on 1 July.
Rates, FX and crypto
| Instrument | Level | Change |
| Bitcoin | 61,457 | +2.50% |
| VIX | 16.15 | -2.65% |
| US 10 Year Treasury Yield | 4.49% | little changed |
| EUR/USD | 1.1430 | +0.47% |
| GBP/USD | 1.3346 | +0.57% |
| USD/JPY | 161.09 | -0.92% |
| USD/EGP | 49.04 | -0.08% |
| USD/KWD | 0.3079 | 0.00% |
Sources: Bureau of Labor Statistics; CNBC; Euronext; Deutsche Boerse; London Stock Exchange; Boursa Kuwait; Saudi Exchange; Abu Dhabi Securities Exchange; Qatar Stock Exchange; Bahrain Bourse; Qatar News Agency.
