U.S. stocks close mixed after job reports
The Dow Jones Industrial Average edged down 10.52 points, or 0.02 percent, to 44,484.42. The S&P 500 rose 29.41 points, or 0.47 percent, to 6,227.42, while the Nasdaq Composite advanced 190.24 points, or 0.94 percent, to 20,393.13.
Seven of the 11 primary S&P 500 sectors ended in green, with energy and materials leading the gainers by adding 1.70 percent and 1.33 percent, respectively. Meanwhile, health and utilities led the laggards by losing 0.97 percent and 0.87 percent, respectively.
Gains were driven in part by upbeat sentiment around trade after U.S. President Donald Trump announced a new deal with Vietnam that includes a 20 percent tariff on Vietnamese imports. Shares of Nike, which sources a significant portion of its footwear from Vietnam and China, jumped more than 4 percent following the news.
Earlier in the day, stocks came under pressure after a disappointing report from ADP showed the private sector shed 33,000 jobs in the prior month, which was the first decline in more than a year and well below economist forecasts of a 100,000-job increase. While the ADP report does not always align with the government's official nonfarm payrolls data, due on Thursday, it raised concerns about broader labor market weakness. Economists expect 110,000 jobs to have been added in June.
Some strategists said the report could push the Federal Reserve closer to a rate cut, especially if government data also shows softness. Market expectations for a July rate cut rose slightly to 23 percent, up from 21 percent a day earlier, according to CME FedWatch.
"If we end up having a fairly weak employment report, then that could allow the Fed to be cutting rates," said Sam Stovall, chief investment strategist at CFRA Research. "We think labor demand is slowing, but so far the slowdown is modest," Morgan Stanley chief U.S. economist Michael Gapen wrote in a note to clients.
Among major tech movers, Tesla surged nearly 5 percent despite reporting a year-over-year drop in global second-quarter deliveries, as the decline was smaller than feared. Apple gained 2.22 percent, extending its winning streak to four sessions. Nvidia and Broadcom rose 2.58 percent and 1.95 percent, respectively, and Alphabet added 1.61 percent. Microsoft, Amazon, and Meta Platforms slipped modestly.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Star
an hour ago
- The Star
US-Vietnam trade deal sows new China uncertainty
FILE PHOTO: The production line of the Ford F-150 Lightning electric pickup truck in Dearborn, Mich., April 4, 2022. Vietnam is set to face a minimum 20 per cent tariff in return for opening its market to US products, including cars.- The New York Times HANOI: Vietnam's trade deal with the United States averts the most punishing of Donald Trump's "reciprocal" levies but analysts warned it could provoke a fresh standoff between Washington and Beijing. The South-East Asian nation has the third-biggest trade surplus with the United States of any country after China and Mexico, and was targetted with one of the highest rates in the US president's "Liberation Day" tariff blitz on April 2. The deal announced Wednesday (July 2) is the first full pact Trump has sealed with an Asian nation, and analysts say it may give a glimpse of the template Washington will use with other countries still scrambling for accords. The 46 per cent rate due to take effect next week has been averted, with Vietnam set to face a minimum 20 per cent tariff in return for opening its market to US products including cars. But a 40 per cent tariff will hit goods passing through the country to circumvent steeper trade barriers - a practice called "transshipping". Washington has accused Hanoi of relabelling Chinese goods to skirt its tariffs, but raw materials from the world's number two economy are the lifeblood of Vietnam's manufacturing industries. "From a global perspective, perhaps the most interesting point is that this deal again seems in large part to be about China," said Capital Economics. It said the terms on transshipment "will be seen as a provocation in Beijing, particularly if similar conditions are included in any other deals agreed over coming days". Shares in clothing companies and sport equipment manufacturers - which have a large footprint in Vietnam - rose on news of the deal in New York. But they later declined sharply as details were released. "This is a much better outcome than a flat 46 per cent tariff, but I wouldn't celebrate just yet," said Hanoi-based Dan Martin of Asian business advisory firm Dezan Shira & Associates. "Everything now depends on how the US decides to interpret and enforce the idea of transshipment," he added. "If the US takes a broader view and starts questioning products that use foreign parts, even when value is genuinely added in Vietnam, it could end up affecting a lot of companies that are playing by the rules." Vietnam's government said in a statement late on Wednesday that under the deal the country had promised "preferential market access for US goods, including large-engine cars". But the statement gave scant detail about the transshipment arrangements in the deal, which Trump announced on his Truth Social platform. Bloomberg Economics forecast Vietnam could lose a quarter of its exports to the United States in the medium term, endangering more than two per cent of its gross domestic product as a result of the agreement. Uncertainty over how transshipping will be "defined or enforced" is likely to have diplomatic repercussions, said Bloomberg Economics expert Rana Sajedi. "The looming question now is how China will respond," she said. "Beijing has made clear that it would respond to deals that came at the expense of Chinese interests." "The decision to agree to a higher tariff on goods deemed to be 'transshipped' through Vietnam may fall in that category," added Sajedi. "Any retaliatory steps could have an outsized impact on Vietnam's economy." - AFP
New Straits Times
an hour ago
- New Straits Times
Malaysia's tech index outpaces peers after US-Vietnam trade deal
KUALA LUMPUR: Bursa Malaysia Technology Index outshines its peers on Thursday, with four component stocks ranking among the most active on the exchange. Driven by renewed buying interest following the United States-Vietnam trade agreement, the index rose 0.78 of-a-point or 1.5 per cent to 52.81 at midday from Wednesday's close of 52.03. Trading volume soared to 21.7 million units, reaching its highest level in nearly four weeks. The index, comprising 49 component stocks, has climbed 8.6 per cent since June 23, although it remains down 18.9 per cent year-to-date. Zetrix AI Bhd, formerly known as MyEG Services Bhd, led the most active board with over 50 million shares traded in the morning session. The stock gained one sen or one per cent to 97.5 sen from the previous close of 96.5 sen, lifting its market capitalisation to RM7.5 billion. The other three high-volume tech stocks were NexG Bhd, Dagang Nexchange Bhd (DNeX) and Inari Amertron Bhd, which saw trading volumes ranging from 20.7 million to 40.4 million units. NexG rose half a sen or 1.32 per cent to 38.5 sen, DNeX climbed half a sen or 1.71 per cent to 29.5 sen and Inari edged up four sen or two per cent to RM2.04. Malacca Securities Sdn Bhd said Wall Street's sentiment improved after the US-Vietnam trade agreement, which imposes a 20 per cent tariff on Vietnamese goods while allowing US products to be sold in Vietnam without duties. "With a positive lead from Wall Street, especially the buying interest in tech stocks following the trade deal, we expect the buying interest to spillover to the local exchange. "With the resumption of optimism surrounding the data centre developments, traders may want to monitor technology and telecommunication stocks like EG Industries Bhd, Mi Technovation Bhd and Telekom Malaysia Bhd," the firm said.
New Straits Times
2 hours ago
- New Straits Times
Japan's yen is a compelling trade but comes at a cost
SINGAPORE: Global investors are unwinding their wagers on Japan's yen rising quickly as a cautious central bank, a trade war and the prohibitive cost of holding the currency sour one of the year's most popular trades. Most analysts and real money investors remain convinced the yen will eventually appreciate as Japan shifts away from ultra-low rates. But pitted against this conviction are short-term headwinds, including the lack of progress on a trade deal with the United States and uncertainty surrounding Japanese national elections. Monetary policy has become the yen's biggest sticking point after the Bank of Japan (BOJ) has hinted it is loath to raise rates again this year, having done so in January, before it can gauge the full impact of US President Donald Trump's sweeping tariffs. James Athey, London-based fixed income manager at Marlborough, has reduced his long yen positions versus the dollar because he sees short-term positioning in the currency and the BOJ's "intransigence" as headwinds. "Ultimately we do still see numerous long-term tailwinds for the yen, it's just about managing the journey amongst this uncertainty and volatility," he said. Investors still hold net long positions in the yen worth US$11.41 billion, although that's drastically lower than the record US$15.70 billion at the end of April, weekly data from the US markets regulator showed. By virtue of low Japanese yields and huge offshore investments, the yen has historically been sensitive to overseas interest rates. The yawning gap between the US and Japanese interest rates in the past few years had driven the yen to record lows, prompting costly interventions from Tokyo. That gap also makes owning the yen, whose bonds pay 0.50 per cent on average, using US dollars that cost upwards of 4.00 per cent, an expensive proposition for investors. If the yen depreciates, it's a double-whammy. Bo Zhuang, global macro strategist for Loomis Sayles, an affiliate of Natixis Investment Managers, said investors expected at the beginning of the year the long yen trade would work well over three to six months. "But now it's about 'oh well, maybe it will last more than that' and the cost of holding such a position might be too high for them to recover." Shifting expectations At the start of 2025, market expectations were for Japan to raise rates quickly and for the US Federal Reserve to start cutting rates later in the year. Yen buyers were rewarded when Trump's sweeping trade tariffs in April jolted markets, shook investors' faith in the US dollar and caused a swift 9 per cent rise in the yen from levels near 160 per dollar, its strongest first-half performance since 2016. But the yen has been meandering since then as the BOJ turned cautious. "The trade faces a negative carry because of the interest rate differential and needs to be actively managed," said Matthias Scheiber, senior portfolio manager at Allspring Global Investments, who reduced his long yen position. But Scheiber reckons any sell-off in yen is an opportunity to buy it. "We still like the trade, despite the fact that over the last couple of weeks, it was basically trading flat," said Scheiber, who is also the head of the multi-asset solutions team at Allspring. In the derivatives market too, options betting on a higher yen cost more, in a sign of bullishness on the currency. Interest in low-cost yen options that deliver outsized payoffs if the currency strengthens sharply has jumped. The yen's trajectory will heavily depend on where US duties end up after Trump this week cast doubt over a possible deal with Japan. He also suggested a tariff of 30 per cent or 35 per cent on imports from Japan — well above the previous 24 per cent tariff rate. A high tariff rate will stifle Japan's major auto exports and make the BOJ's path towards shifting away from decades of ultra-low rates even more perilous. "I think the yen is waiting for catalyst in terms of how the US-Japan trade negotiations go because I think that's a roadblock for policymakers," said Moh Siong Sim, currency strategist at Bank of Singapore.
