3 Min. Market Summary
07/02/2026

Markets are closed for the holiday tomorrow, but if you need anything over the weekend please let me know!

Mortgage rates bounced around again this week. Today rates dipped a bit, but not enough to erase the jump from earlier in the week. So heading into the holiday weekend, rates are a little higher than they were last week. If the bond market calms down after the holiday, we could see rates improve again next week.

Rates climbed early in the week after the Job Openings and Labor Turnover Survey (JOLTS) showed more job openings than expected, suggesting the labor market was still holding up.

Adding to the pressure on Tuesday, Cleveland Fed President Beth Hammack made hawkish comments suggesting the Federal Reserve may still need to raise rates. She argued that massive investment in artificial intelligence and extra money in consumers’ pockets from lower gas prices could keep inflation elevated in an economy she believes is already strong.

Just a day after the stronger JOLTS job data, the ADP Employment Report painted a different picture with slower-than-expected hiring, a reminder that the labor market isn’t sending one clear signal right now.

Then on Thursday, the Bureau of Labor Statistics reported just 57,000 new jobs in June, far below expectations, with sizable downward revisions to prior months.

That shifted the market’s outlook and helped mortgage rates improve, but not enough to erase the increases from earlier in the week.

With the bond market closing early ahead of the holiday weekend, lenders may also have been cautious about making larger pricing improvements before markets reopen next week.

Keep reading for a full breakdown of this week’s market-moving news:

Labor Market (Jobs)

ADP Employment Report

• June payrolls increased by 98,000, below expectations of 110,000.
• Education and Health Services accounted for nearly half of all new jobs with 48,000 added.
• Hiring remained broad across business sizes.
• Wage growth for workers staying in their jobs held at 4.4% year over year.
• Job switchers saw wage growth rise slightly to 6.6%.

Bureau of Labor Statistics (BLS) Jobs Report

• June payrolls increased by just 57,000, roughly half of market expectations.
• May payrolls were revised lower by 43,000 and April by 31,000.
• Combined revisions reduced prior job gains by 74,000.
• Education and Health added 69,000 jobs while every other sector combined lost 12,000.
• Leisure and Hospitality lost 61,000 jobs.
• Household Survey showed 507,000 fewer employed people.
• Full time employment declined by 514,000.
• Part time employment fell by 53,000.
• Unemployment declined from 4.3% to 4.2% because 720,000 people left the labor force, not because hiring improved.

Job Openings and Labor Turnover Survey (JOLTS)

• Job openings rose to 7.6 million, above expectations.
• Leisure and Hospitality openings increased because of World Cup related hiring.
• Hiring rate remained historically weak at 3.3%.
• Quits rate stayed at 1.9%, showing workers remain reluctant to leave jobs.

Challenger Job Cuts

• Artificial Intelligence remained the top reason for announced job cuts for the fourth straight month.
• AI accounted for 31% of June job cuts and nearly one quarter of all job cuts year to date.

Mortgage Bankers Association (MBA)

• Average mortgage rates remained near 6.6%.

Inflation

Oil Prices

• Oil fell from about $70 early in the week to below $68 by Thursday.
• Lower energy prices are expected to help reduce inflation if they remain low.

Apartment List Rental Report

• Rents increased 0.4% in June, which is typical for the season.
• Rent prices remain down 1.2% year over year.
• Vacancy rates stayed elevated.
• Longer leasing times suggest continued cooling in rental inflation.

Federal Reserve Commentary

• Cleveland Fed President Beth Hammack argued lower oil prices and Artificial Intelligence could increase inflation.
  • While AI can boost productivity over time, in the short term she says all of the spending on data centers, chips, competing for talent and even higher electricity costs can be inflationary.
  • Her argument around oil, is that lower prices can stimulate additional spending in retail, restaurants and travel. Business save money that they can use to expand and invest. In an economy already running hot, that can create inflation.
• Her hawkish comments pushed Treasury yields higher and pressured mortgage bonds.
• The weaker jobs report later in the week reduced concerns that the Fed would need to raise rates.

Economic Reports and Forecasts

Home Price Reports

• ICE Home Price Index showed home prices up 1.32% year over year and strengthening monthly appreciation.
• Case-Shiller reported 0.8% monthly appreciation before seasonal adjustments and nearly 1% annual appreciation.
• Federal Housing Finance Agency reported home values down slightly after seasonal adjustments but nearly 2% higher than a year ago. Raw price gains remained solid.

Market Outlook

• Early in the week markets expected stronger employment because of World Cup related hiring and firm labor data.
• The much weaker BLS report shifted expectations toward a softer economy and reduced the likelihood of additional rate hikes this year.

Federal Reserve and Monetary Policy

Federal Reserve

• Markets reacted negatively after Beth Hammack made the case for additional rate hikes.
• Falling oil prices and weaker labor data strengthened the case for keeping rates unchanged.
• Attention now shifts to next week’s Federal Reserve meeting minutes for more insight into policy thinking.

Other

Geopolitics

• Oil markets remained focused on the ceasefire between the United States and Iran and continued diplomatic talks.
• Despite ongoing uncertainty, oil prices continued moving lower during the week, helping improve the inflation outlook.