Wall Street Week Ahead: Jobs data, tax bill, trade on tap for rebounding US stocks
NEW YORK: Key US economic data, developments with federal tax-and-spending legislation and twists and turns on trade all are poised to influence equities in the coming week, with the US market closing in on record highs.
The S&P 500 was set for a weekly gain with the benchmark index on Thursday ending about 4% from its February all-time high.
Investors at the end of the week were grappling with implications from legal rulings involving efforts to block most of President Donald Trump's tariffs. Trump's trade war has whipsawed global markets for weeks on concerns about economic fallout.
The coming week also brings a raft of economic and labor market data, headlined by the monthly US employment report out on Friday.
'Now that we're back up here not all that far from the record high, I think the hard data needs to hold in better than the market expects to really advance from here,' said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.
The employment report for May is expected to show an increase of 130,000 jobs, according to a Reuters poll of economists, which would be a step down from growth of 177,000 the prior month.
Investors have been eager to learn how Trump's tariffs may be rippling through the economy, especially in the wake of his April 2 'Liberation Day' announcement of sweeping levies on imports.
The May data represents a full month of 'how businesses have been handling some of the tariff uncertainty and some of the pressures in the market,' said Anthony Saglimbene, chief market strategist at Ameriprise Financial.
Still, an overly strong employment report, such as growth of over 200,000 jobs, might be viewed warily by the market because it could delay interest rate cuts by the Federal Reserve, said Eric Kuby, chief investment officer at North Star Investment Management Corp.
Investors have reduced bets in recent weeks on the amount of expected Fed easing this year, with about two rate cuts priced in by December, according to LSEG data.
Minutes of their latest meeting released this week showed Fed officials acknowledged they could face 'difficult tradeoffs' in coming months with rising inflation alongside rising unemployment.
Fiscal legislation in Washington will also be in focus. The Senate will start considering a tax-and-spending bill passed earlier this month by the House of Representatives. Trump said this week he plans to negotiate aspects of the 'big, beautiful' tax bill, a day after billionaire Elon Musk said the bill detracts from efforts to reduce the US budget deficit.
The bill, which will add an estimated $3.8 trillion to the federal government's $36.2 trillion in debt over the next decade, has focused attention on the impact of increasing deficits on the Treasury market. Rising bond yields have pressured stocks in recent weeks.
The shifting tariff backdrop also appeared likely to influence asset prices. Equities rebounded in recent weeks after Trump eased his harshest tariffs, but the situation remains in flux as Washington negotiates with trading partners.
On Thursday, for instance, stocks rose early the session after a US trade court blocked many of Trump's tariffs, but gains faded during the session. Later, a federal appeals court reinstated the tariffs, further muddying the backdrop.
'There's initial excitement and then the reality set in that this is just another step in this process and it really hasn't clarified very much,' Kuby said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 hours ago
- Express Tribune
Midday work ban returns in UAE as summer heat precautions take effect
Workers at a construction site as the UAE implements a midday work break from 12:30 p.m. to 3:30 p.m. for laborers to help cope with the heat, Dubai, United Arab Emirates, August 15, 2023. PHOTO: REUTERS Listen to article The United Arab Emirates will implement its annual midday work ban starting June 15, prohibiting outdoor work under direct sunlight between 12:30pm and 3:00pm daily. The three-month initiative, aimed at safeguarding workers during the hottest part of the day, will remain in effect until September 15. Now in its 21st year, the "midday break" is a cornerstone of the UAE's labour protection policies during summer. The Ministry of Human Resources and Emiratisation (Mohre) will oversee enforcement through inspection teams and digital monitoring systems. Employers who violate the rule will face fines of Dh5,000 per worker, up to a maximum of Dh50,000 for multiple violations. Companies are required to provide shaded rest areas, cooling equipment like fans, and an adequate supply of drinking water and electrolyte supplements approved by health authorities. First-aid kits and other safety amenities must also be available at worksites, as part of broader health and safety obligations under the law. Certain jobs are exempt from the ban, particularly those that must continue uninterrupted due to technical constraints. These include tasks such as asphalt laying or concrete pouring, which may not be feasible to complete outside of restricted hours. Exemptions also apply to emergency repair work or services critical to public safety and infrastructure, including water and electricity maintenance, and traffic-related issues. In such cases, a special permit must be obtained from the relevant authorities. Residents are encouraged to report any violations or unsafe practices through Mohre's hotline (600590000), official website, or smart application. The ministry will also ramp up public awareness campaigns and field inspections across both private and public sectors to reinforce compliance. In recent years, the midday break has recorded over 99% compliance, reflecting its growing success and acceptance among employers. The initiative forms part of the UAE's broader commitment to labour rights and public health, particularly during the extreme summer months.
Business Recorder
3 hours ago
- Business Recorder
Oil prices climb 2% to 2-week high on geopolitical tension concerns
LONDON: Oil edged up on Tuesday, in the face of rising geopolitical tensions as the war in Ukraine ramped up despite peace talks in Turkey and Iran was set to reject a U.S. nuclear deal proposal that would be key to easing sanctions on the major oil producer. Crude had gained nearly 3% on Monday after the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, kept its July output hike at 411,000 barrels per day, the same as earlier months and less than some in the market had feared. Brent crude futures gained 45 cents, or 0.7%, to $65.08 a barrel by 1154 GMT. U.S. West Texas Intermediate crude was up 31 cents, or 0.5%, to $62.83. 'Risk premia have filtered back into the oil price following deep Ukraine strikes on Russia over the weekend,' said analyst Harry Tchilinguirian of Onyx Capital Group. 'But more importantly for the barrel count, there is the to and fro between the U.S. and Iran regarding uranium enrichment.' Oil leaps 4% after OPEC+ keeps output increase unchanged Ukraine and Russia at the weekend ramped up the war with one of the biggest drone battles of their conflict, a Russian highway bridge blown up over a passenger train and an attack on nuclear-capable bombers deep in Siberia. Iran, meanwhile, was poised to reject a U.S. proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address Tehran's interests or soften Washington's stance on uranium enrichment. If the nuclear talks fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive of oil prices. Further support came from the weak dollar. The dollar index held near six-week lows as investors weighed the outlook for U.S. President Donald Trump's tariff policy and its potential to hurt growth and stoke inflation. A weaker U.S. currency makes dollar-priced commodities such as oil less expensive for holders of other currencies. 'Crude oil prices continue to rise, supported by the weakening dollar,' said Priyanka Sachdeva, senior market analyst at Phillip Nova. Adding to supply worries, wildfires burning in Canada's province of Alberta have affected more than 344,000 barrels per day of oil sands production, or about 7% of the country's overall crude output, according to Reuters calculations. Further price support could come if forecasts of a drop in U.S. crude inventories are realised in the latest round of weekly supply reports.
Business Recorder
3 hours ago
- Business Recorder
Global alarms rise as China's critical mineral export ban takes hold
Alarm over China's stranglehold on critical minerals grew on Tuesday as global automakers joined their U.S. counterparts to complain that restrictions by China on exports of rare earth alloys, mixtures and magnets could cause production delays and outages without a quick solution. German automakers became the latest to warn that China's export restrictions threaten to shut down production and rattle their local economies, following a similar complaint from an Indian EV maker last week. China's decision in April to suspend exports of a wide range of critical minerals and magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world. The move underscores China's dominance of the critical mineral industry and is seen as leverage by China in its ongoing trade war with U.S. President Donald Trump. Trump has sought to redefine the trading relationship with the U.S.' top economic rival China by imposing steep tariffs on billions of dollars of imported goods in hopes of narrowing a wide trade deficit and bringing back lost manufacturing. Trump imposed tariffs as high as 145% against China only to scale them back after stock, bond and currency markets revolted over the sweeping nature of the levies. China has responded with its own tariffs and is leveraging its dominance in key supply chains to persuade Trump to back down. Trump and Chinese President Xi Jinping are expected to talk this week and the export ban is expected to be high on the agenda. Shipments of the magnets, essential for assembling everything from cars and drones to robots and missiles, have been halted at many Chinese ports while the Chinese government drafts a new regulatory system. Once in place, the new system could permanently prevent supplies from reaching certain companies, including American military contractors. The suspension has triggered anxiety in corporate boardrooms and nations' capitals - from Tokyo to Washington - as officials scrambled to identify limited alternative options amid fears that production of new automobiles and other items could grind to a halt by summer's end. 'If the situation is not changed quickly, production delays and even production outages can no longer be ruled out,' Hildegard Mueller, head of Germany's auto lobby, told Reuters on Tuesday. Frank Fannon, a minerals industry consultant and former U.S. assistant secretary of state for energy resources during Trump's first term, said the global disruptions are not shocking to those paying attention. 'I don't think anyone should be surprised how this is playing out. We have a production challenge (in the U.S.) and we need to leverage our whole of government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,' Fannon. Diplomats, automakers and other executives from India, Japan and Europe were urgently seeking meetings with Beijing officials to push for faster approval of rare earth magnet exports, sources told Reuters, as shortages threatened to halt global supply chains. A business delegation from Japan will visit Beijing in early June to meet the Ministry of Commerce over the curbs and European diplomats from countries with big auto industries have also sought 'emergency' meetings with Chinese officials in recent weeks, Reuters reported. India, where Bajaj Auto warned that any further delays in securing the supply of rare earth magnets from China could 'seriously impact' electric vehicle production, is organizing a trip for auto executives in the next two to three weeks. In May, the head of the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major automakers raised similar concerns in a letter to the Trump administration. 'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,' the Alliance for Automotive Innovation wrote in the letter.
