Wall Street’s unexpected rally: How a Vietnam trade deal turned the tide

2 minutes read

03 July 2025

Wall Street’s unexpected rally: How a Vietnam trade deal turned the tide

The morning started with a cloud hanging over Wall Street. News broke that the US private sector had lost 33,000 jobs in June, sparking anxiety ahead of the government’s all-important jobs report. Investors braced for a downbeat day. But as the session wore on, a new narrative took hold—one that would send the S&P 500 and Nasdaq to record highs and give investors a reason to cheer1.

Trump’s Vietnam trade deal: A catalyst for optimism

President Donald Trump’s announcement of a trade agreement with Vietnam changed the mood almost instantly. The deal, which set a 20% tariff on Vietnamese imports—far less than the previously threatened 46%—was a relief for businesses and markets alike. Companies that rely heavily on Vietnamese manufacturing, like Nike, Lululemon, and Columbia Sportswear, saw their shares jump. Nike, in particular, surged by 3.1% on the day, adding to the momentum from its recent earnings beat.

Sam Stovall of CFRA Research summed up the market’s reaction: The S&P 500 climbed 0.5% to a new all-time high, its third in just four sessions. The Nasdaq Composite followed suit, gaining 0.9% and closing at a record 20,393.13. Even the Dow Jones, which started the day in the red, managed to recover some ground as optimism spread.

This burst of positivity came despite rising US Treasury yields—a sign that the bond market remains uneasy about the government’s ambitious tax and spending plans. Jack Ablin of Cresset Capital Management captured the tension: “It’s driven a wedge between stocks and bonds. Equity markets are applauding the tax cuts... bond markets are concerned about the long-term effects.” Bar chart showing the top stock gainers, with Nike leading at 4.18%, followed by Nvidia, Apple, Chevron, and Goldman Sachs.

Winners, losers, and what comes next

Nike’s rally was more than just a reaction to tariffs. Only days earlier, the company had posted a 17.65% surge after beating earnings expectations for the eighth consecutive quarter. Its turnaround strategy seemed to be working, and the latest trade news gave investors yet another reason to stay bullish.

Nvidia also rode a wave of optimism, with its advances in artificial intelligence continuing to attract investor interest. These tech and consumer giants led the charge, helping the broader market shrug off concerns about the slowing jobs market.

But not everyone was celebrating. The jobs data painted a picture of an economy losing steam. Economists expect the June jobs report to show employers added just 110,000 jobs, down from 139,000 in May, with the unemployment rate ticking up to 4.3%—the highest since 2021.

Samuel Tombs, chief US economist at Pantheon Macroeconomics, warned: “Signs that payroll growth is losing momentum are coming in thick and fast.”

For now, Wall Street seems content to focus on the positives: new trade deals, strong tech earnings, and the hope that the Federal Reserve might cut rates if the jobs market continues to cool. Investors are watching closely, knowing that the next twist in the story could come as soon as the next jobs report.

The day’s events show how quickly sentiment can shift on Wall Street. One moment, all eyes are on disappointing data; the next, a single trade deal can spark a rally. It’s a reminder that in the world’s biggest market, the story is always evolving—and opportunity often comes when you least expect it.

Disclaimer: The views and recommendations made above are those of individual analysts or brokerage companies, and not of Winvesta. We advise investors to check with certified experts before making any investment decisions.