All three major Wall Street indices hit new highs for the week (28 June-2 July) ahead of the Fourth of July holiday with the Nasdaq Composite up nearly 2% for the week, the S&P 500 climbing by 1.7% and the Dow Jones advancing by 1%.

Several sectors including tech and health care closed at record levels on Friday lifting the S&P 500 for the seventh session in a row, its longest winning streak since last August.

US equities had been edging up incrementally all week in the wake of a slew of positive data pointing to a continuing solid US economic recovery, capped by a better-than-expected jobs report on Friday that saw 850,000 jobs added, which was above estimates of 706,000 and the biggest uptick in 10 months.

Average hourly wages rose 0.3% on-month which allayed fears of inflationary pressures from wage increases while also easing concerns over a potential labour shortage. Most job gains were in leisure, hospitality and retail which point to a reviving labour market amid business reopening as virus-related restrictions are being lifted though concerns over the new Delta variant remain among those unvaccinated.

Economy watchers noted that the data indicated solid growth with no indications of overheating which allows the Fed to maintain its current policy path with the ability to focus on any hot spots – such as housing which it can address with the monetary tools at its disposal such as cutting back on purchases of mortgage-backed securities (MBS).

For now, the Goldilocks-like data point to a continued strong recovery in the second half of the year with a lesser likelihood for the Fed to start tapering bond purchases. The receding inflation worries were reflected in the US 10-year yield which dipped further to 1.43% from 1.53% a week earlier, well below the highs at 1.75% earlier this year which back then, had put pressure on tech and growth stocks.

That explains why both these segments were back in favour amid the constant tussle for leadership between value (cyclicals) and growth shares. There are views among some investors that with economic growth gaining traction, it is also time to switch the focus from cyclical and reflation trades back to the more sustainable players within the tech and growth segments.

Year-to-date, cyclicals have accounted for some of the better performers with energy up by 44.5% and financials by 25.2%; while S&P 500 growth stocks in contrast are up by 14.3% and techs by 14.9%, lagging the S&P 500′s 15.5% first-half advance.

Historically, strong first halves for the stock market tend to bode well for the rest of the year. Both the Dow and S&P 500 have yet to see annual declines after carding double-digit first-half gains. According to data from LPL Financial, the median gain is 9.7% for the second half whenever the S&P 500 rakes up more than 12.5% for the first six months of the year.

With Wall Street closed on Monday, the shortened trading week ahead may see US equities taking a breather after experiencing new highs, especially when there is not much by way of economic data aside from ISM services data.

However, the Fed’s minutes from its June meeting in midweek may yield clues as to whether there had been more behind-the-scenes discussions over the timing for winding down its quantitative easing (QE) programmes which had buoyed markets from the massive injection of liquidity.

While the central bank officials have stressed that the Fed’s actions will be more data-driven than being proactive, there is always the potential for the meeting minutes to surprise the market, which was what had happened for the April FOMC minutes.

That was when it was revealed that “a number of participants” had felt that it would be appropriate to begin discussing tapering at “upcoming meetings” if the economy continues to make strong progress.

Some Fed watchers are already of the view that more details about bonds tapering and more importantly the timing will be forthcoming at the Fed’s annual symposium at Jackson Hole in late August.