Wall St edges down after ADP shock; focus on trade talks, payrolls data
The ADP National Employment Report showed U.S. private payrolls fell unexpectedly in June and job gains in the prior month were smaller than initially thought.
Investors quickly increased their bets of a rate cut by the U.S. Federal Reserve in July to 25.3%, from about 20% prior to the report, according to LSEG data.
'I take it as a mixed bag. On one hand, the wage is still strong, which is terribly important to the U.S. economy. On the downside, if this isn't seasonality, this is the beginning of a long-term trend in white collar jobs that'll spill over into the total labor market,' said Ross Mayfield, investment strategist at Baird.
'It would be very damaging for the overall economy and obviously make the Federal Reserve react despite their concerns about tariffs causing inflation.'
The Nasdaq and the S&P 500 closed lower in the previous session, retreating from record highs as technology stocks were pressured and Treasury yields climbed after data showed stronger-than-expected job openings in May.
Focus now turns to the more comprehensive non-farm payrolls report, scheduled for release on Thursday - a day earlier than usual, as markets are closed on Friday for Independence Day. The reading is expected to show U.S. job growth cooled in June and the unemployment rate ticked up to 4.3%, according to a Reuters poll of economists.
S&P 500, Nasdaq at record highs as trade hopes feed quarterly momentum
On trade, Trump said on Tuesday he was not thinking of extending the July 9 deadline for imposing tariffs and expressed doubts that an agreement could be reached with Japan, although he said he expected a deal with India. The European Union's trade chief is expected to hold talks this week with peers in Washington.
At 10:00 a.m. ET (1400 GMT), the Dow Jones Industrial Average fell 75.68 points, or 0.17%, to 44,419.26, the S&P 500 lost 0.92 points, or 0.01%, to 6,197.09, and the Nasdaq Composite gained 43.60 points, or 0.22%, to 20,246.49.
Meanwhile, the blue-chip Dow was within 1.4% of hitting an all-time high.
U.S. Senate Republicans passed Trump's massive tax-and-spending bill on Tuesday by the narrowest of margins, advancing a package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending, while adding $3.3 trillion to the national debt.
The legislation now heads to the House of Representatives for possible final approval, although a handful of Republicans have already opposed some of the Senate provisions.
Seven of the 11 major S&P sectors nursed losses, with healthcare falling about 0.7%, leading declines.
Centene tumbled 33.7%, set for its worst day on record if losses hold, after the health insurer said it had withdrawn its 2025 earnings forecast following data that showed a significant drop in expected revenue from its marketplace health insurance plans.
Shares of peers including Elevance Health dropped 7%, Molina Healthcare sank 15% and UnitedHealth lost 2%.
Adding to the strain on equities, the U.S. 10-year benchmark yield rose 4 basis points, extending its climb from the previous session.
However, megacaps such as Tesla and Apple helped limit the overall losses and rose more than 2.4% each.
Tesla posted another big drop in quarterly deliveries, putting it on course for its second straight annual sales decline as demand falters due to backlash over CEO Elon Musk's political stance and an aging vehicle lineup.
Verint Systems rose 5% after Bloomberg News reported buyout firm Thoma Bravo was in talks to acquire the call-center software maker.
Declining issues outnumbered advancers by a 1.12-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq.
The S&P 500 posted 15 new 52-week highs and two new lows, while the Nasdaq Composite recorded 20 new highs and 25 new lows.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 hours ago
- Business Recorder
China stocks flat as investors gauge global trade tensions
HONG KONG: Chinese stocks were flat on Wednesday as investors weighed persistent global trade tensions and refrained from placing massive bets, while Hong Kong shares closed higher after a local holiday. At close, the Shanghai Composite index held its ground at 3,454.79, hovering near a three-month high. China's blue-chip CSI300 index climbed less than 0.1%. Defensive sectors helped lift the markets onshore, with the banking sector sub-index up 0.8% while liquor distiller sector advanced 0.6%. Tech shares weighted on the markets, with the semiconductor sector and AI-related shares losing around 2% each. Hong Kong shares edged higher as traders returned from a local holiday. The benchmark Hang Seng Index added 0.6% at 24,221.41, while the Hang Seng China Enterprises Index, which tracks Chinese H-shares listed in the city, gained 0.5%. The local property sub-index added 2%, helping boosting the markets. Cash-strapped property giant New World Development surged nearly 10% after closing $11.2 billion refinancing deal. Caution prevailed across the region as investors await developments in trade talks, after US President Donald Trump said he was not considering extending the July 9 deadline for countries to negotiate trade deals with the United States. The US and India are nearing a deal that would lower tariffs on American imports to the South Asian country, while doubt has been cast on a deal with Japan. Around the region, MSCI's Asia ex-Japan stock index edged up 0.1%, while Japan's Nikkei index was down 0.6%. BlackRock Investment Institute said they are neutral on Chinese equities in the second half due to trade policy and stimulus uncertainties, but see selective opportunities in priority sectors that could receive targeted support.
Business Recorder
4 hours ago
- Business Recorder
Trump says US struck trade deal with Vietnam
WASHINGTON/HANOI: The United States and Vietnam struck a trade agreement that sets 20% tariffs on many of the Southeast Asian country's exports following last minute negotiations, US President Donald Trump and Vietnamese state media said on Wednesday. The rate is lower than an initial 46% levy Trump announced in April on goods from Vietnam which was due to take effect next week. Trump said that goods from Vietnam would face a 20% tariff and that any trans-shipments from third countries would face a 40% levy. Details were scarce and it was not immediately clear how the trans-shipment provision would be implemented. Vietnam would also provide the United States with more market access, with US exports to the country facing no tariffs, Trump said. That agreement appears to include US exporters of large-engine cars, according to Trump and Vietnamese state media. 'It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,' Trump said on Truth Social. 'It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam,' Trump said. Vietnamese President To Lam asked in a phone call with Trump earlier on Wednesday that the United States recognize Vietnam as a market economy and remove restrictions on the exports of high-tech products to the country, Vietnam News Agency reported. Those changes have long been sought by Hanoi and dismissed by Washington.
Business Recorder
4 hours ago
- Business Recorder
Wall St recovers with help from Nvidia, Tesla
NEW YORK: US stocks recovered from opening losses to trade higher on Wednesday, helped by Nvidia, Apple and Tesla, while investors looked ahead to the non-farm payrolls report for clues on how soon the Federal Reserve would lower borrowing costs. Tesla rose 4.2%, even as the EV-maker posted a big drop in second-quarter deliveries, with some traders saying the numbers were less severe than analysts' bleak forecasts. The stock has shed more than 20% this year. Nvidia rose 2.2%, while Apple added 1.8%, keeping technology shares in the lead. Markets opened lower after data showed US private payrolls fell unexpectedly in June and job gains in the prior month were smaller than initially thought, fueling increased bets of interest-rate cuts as soon as July. The focus, however, is on the more comprehensive non-farm payrolls report on Thursday - set to be released a day earlier than usual, with markets closed on July 4 for Independence Day. The reading is expected to show US job growth cooled in June and the unemployment rate ticked up to 4.3%, according to a Reuters poll of economists. 'What's happening now is the data is getting very close for the Fed to make a move. There's going to be a cut - it's just a matter of July or September and then we'll go from there,' said Joe Saluzzi, co-manager of trading at Themis Trading. 'The (April) selloff really shook a lot of people out and you might see more buyers coming in. I think momentum is very powerful in this market.' The Nasdaq and the S&P 500 touched record highs on Monday, recovering from their April slump as investors looked past trade uncertainties and geopolitical tensions to bet on accommodative monetary policy from the US central bank and AI potentially driving earnings for tech companies. The blue-chip Dow was within 1.3% of hitting an all-time high. At 11:58 a.m., the Dow Jones Industrial Average rose 2.29 points, or 0.00%, to 44,496.43, the S&P 500 gained 17.19 points, or 0.27%, to 6,214.98, and the Nasdaq Composite gained 152.33 points, or 0.75%, to 20,354.69. President Donald Trump said on Tuesday he was not considering extending the July 9 deadline for imposing tariffs and expressed doubts that an agreement could be reached with Japan, but said the US had struck a deal with Vietnam and expected one with India. Meanwhile, Trump's massive tax-and-spending bill heads to the US House of Representatives for possible final approval after the Senate passed the legislation, which nonpartisan analysts say will add $3.4 trillion to the national debt over the next decade. Seven of the 11 major S&P sectors nursed losses, with utilities and healthcare falling 1% and 0.7%, respectively. Centene tumbled about 40% and was set for its worst day on record, if losses hold, after the health insurer said it had withdrawn its 2025 earnings forecast after data showed a significant drop in expected revenue from its marketplace health insurance plans. Shares of peers including Elevance Health fell 8%, Molina Healthcare sank 20% and UnitedHealth lost 3.5%. Verint Systems rose 12.2% after Bloomberg News reported buyout firm Thoma Bravo was in talks to acquire the call-center software maker.
