Sentiment among U.S. small businesses improved in July as the National Federation of Independent Business’s Small Business Optimism Index rose 1.7 points to 100.3, beating the median forecast of 98.9 and marking its strongest level since February. The result pushes the gauge back above its long-term average of 98 and signals firmer confidence on Main Street despite lingering macroeconomic uncertainties. The July survey showed a broadening rebound across six of the index’s ten components. A net 36% of owners now expect better business conditions over the next six months, up 14 percentage points from June and the highest share this year. The share saying it is a good time to expand climbed five points to 16%, while plans for capital spending and hiring also edged higher. Even with the brighter outlook, headwinds remain. The NFIB Uncertainty Index jumped eight points to 97, and 21% of respondents flagged labor quality as their top concern. The proportion naming poor sales as their most pressing problem rose to 11%, the highest since February 2021, suggesting demand worries persist even as inflation pressures and price-increase intentions eased.