The Dow Jones Industrial Average closed at an eye-popping 44,484.42 yesterday (July 2, 2025), continuing a rally that has defied nearly every bearish prediction made at the start of the year. I've been watching these markets for over two decades, and what's particularly striking about this bull run is how it's persisted despite significant headwinds - from stubborn inflation to ongoing geopolitical tensions.
Global markets are responding with cautious optimism. European indices are up modestly this morning, with the DAX gaining 0.4% and the FTSE 100 up 0.6%. Asian markets closed mixed, with Chinese markets underperforming due to ongoing property sector concerns.
"American equities continue to be the preferred destination for global capital," Rachel Lee explained to me on a call this morning. She manages Asia-Pacific investments for a major sovereign wealth fund. "The combination of innovation, particularly in AI and biotech, plus relative political stability compared to other regions, makes U.S. stocks almost irresistible right now."
The dollar has strengthened slightly against a basket of currencies - not enough to cause alarm, but something exporters are keeping an eye on. In my experience, sustained dollar strength can eventually become a headwind for multinational companies (which make up a significant portion of the Dow).
Tomorrow's jobs report looms large over the market. Expectations are for around 210,000 new jobs, but the whisper numbers I'm hearing suggest it could come in closer to 250,000. A significant beat could actually trigger a sell-off, strangely enough, as it might encourage the Fed to hold off on expected rate cuts.
Oil prices have remained surprisingly stable throughout this rally, hovering around $82 per barrel for WTI crude. This price stability has helped keep inflation concerns from derailing market sentiment.
For individual investors (like many of you reading this), these record highs present both opportunity and risk. The momentum is clearly positive, but valuations in certain sectors are starting to look stretched by historical standards. I'm personally maintaining my equity allocations but have been gradually shifting toward more defensive positions - just in case this rally finally runs out of steam.
