The Jobs Report: 3 Key Issues That Will Shape the Day

Hello everyone, and welcome. Today, Thursday, July 2, 2026, everything hinges on 2:30 PM. The US jobs report is finally out, and for once, a good number could seriously spook the markets. We're going to break down the three major issues that will shape our trading session.

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The 3 Major Issues to Watch

To put it simply, the day revolves around three hot topics:

1. The jobs number (NFP) and, most importantly, the market's interpretation of it.
2. The semiconductor rout in Asia, which calls for extreme caution.
3. The yield curve, which will be our barometer for anticipating a potential recession.

The Semiconductor Rout: A Warning Sign?

Yesterday, Wall Street closed a record first half, but the session stalled. Chip stocks plunged, dragging the Nasdaq down by 0.66% while the Dow Jones remained stable. We're seeing big moves, with stocks like Micron collapsing by more than 10%, and conversely, Meta jumping nearly 9%.

Why did Meta surge? Simply because its CEO announced they would sell their excess AI-related computing capacity. Basically, they're going to create a cloud to rent out the power of their servers that they don't use constantly. It's pure optimization, a bit like renting out your house on Airbnb during your vacation. The markets love it.

But overnight, the semiconductor sector took a huge hit in Asia. The Nasdaq lost all its gains starting at 2 AM. Samsung, for example, dropped 9% in Korea. It's unsettling, and for Nasdaq traders like me, it's a warning that we need to be very, very cautious.

The Yield Curve: Our Recession Barometer

The second point to watch is the yield curve. I remind you that it compares the 2-year and 10-year US borrowing rates. Normally, lending over a long period should yield much more. However, right now, we have a contraction: the 2-year pays 4.18% and the 10-year only 4.48%. The spread is 0.30 points, which is very narrow.

My advice would be to lend at 2 years. It's better to pocket 4.18% for 2 years and get your money back, rather than locking it up for 10 years for barely more. You're tying up your money for 8 extra years for very little.

Historically, when this spread tightens so much, it's often a harbinger of a recession. It might sound crazy amidst the AI euphoria, but the signals are contradictory. And precisely, if the jobs number is too strong, the central bank might raise rates, which would bring the 2-year rate even closer to the 10-year rate.

The Jobs Report (NFP): The Crucial Event

We've been waiting for it for four days. The jobs report, known as NFP in the United States, is released at 2:30 PM, Paris time. It represents the number of jobs created last month. The consensus expects around 115,000 job creations.

Here's the paradox:

• A number above expectations could be worrisome, as it would mean the economy is doing "too well," prompting the central bank to raise rates to cool things down.
• A number below expectations could relieve the markets, which would assume the Fed won't touch rates.

The real issue, therefore, isn't the number itself, but the expected reaction from the central bank, whose chair already considers prices too high. The ideal scenario? A number that's not too hot, not too cold. Lukewarm isn't so bad on the stock market.

Technical Analysis: Caution is Key

On the Nasdaq, the message is clear: caution, caution, caution. Wait for 2:30 PM. Before the announcement, you'll see the order book completely empty out. Those who remain are casino players, not traders. High volatility is possible.

The S&P 500 is a bit less exposed and remains at its highs. As for the Dow Jones, it continues to break records, quietly. And the CAC 40? It's way down, true to form. It could almost be the start of a song: "CAC 40 way down low and DAX way up high."

Anecdote of the Day: The Power of the Bond Market

To finish, an anecdote that sheds light on our day. In the 90s, James Carville, Bill Clinton's advisor, dropped this somewhat odd line: he dreamed of being reincarnated as the bond market, because it "can intimidate everybody."

Thirty years later, nothing has changed. It's still this very discreet market that calls the shots. That's why I encourage you to get used to watching the spread between the US 2-year and 10-year. If jobs data is too strong today, you'll hear the bond market grumble, and you'll think of good old James Carville.

Conclusion

That's all for today. There's not much else to add. The ending is a bit abrupt, but since this is live and I never re-edit my videos, I prefer to keep that authenticity. So, be careful, and we'll see each other tomorrow, even though it's an American holiday. The resistance is organizing! Much love, and take care.

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