U.S. stocks once again reached all-time highs in the shortened trading week due to the Independence Day holiday, as the latest economic data bolstered investor confidence that the Federal Reserve may soon begin cutting interest rates.

The U.S. job market showed a better-than-expected increase in employment in June. Yet downward revisions for April and May, coupled with a slight, unexpected uptick in the unemployment rate and slower wage growth, indicate an overall cooling of conditions.

An additional warning the U.S. economy might be entering a cooling phase came from the latest Institute for Supply Management Services Purchasing Managers Index, which contracted in June and plunged to its lowest level since May 2020.

Technology and consumer discretionary stocks were the best-performing sectors of the week, driven by the "bad news is good news" narrative as higher rate-cut expectations fuel growth stocks.

The top seven tech stocks — Microsoft Corp., Apple Inc., NVIDIA Corp., Alphabet Inc., Amazon Inc., Meta Platforms Inc. and Tesla, Inc. — have reached a combined market cap of over $16 trillion. For Tesla, this has been the best week in terms of market performance since January 2023.

Chart Of The Week: Magnificent Seven, SPY, QQQ Hit All-Time Highs

Image: Benzinga Pro

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