S&P 500 Flat at 5,970.89, Dow Falls on Weak Jobs Data and 50% Steel Tariffs
U.S. stock markets closed mixed on Wednesday, with the S&P 500 ending nearly flat, the Nasdaq Composite posting modest gains, and the Dow Jones Industrial Average declining. The S&P 500 rose 0.01% to 5,970.89 points, the Nasdaq gained 0.35% to 19,466.42, while the Dow fell 0.20% to 42,435.51.
Trading was choppy amid a series of weak economic indicators. The ADP National Employment Report showed private sector job growth in May at 37,000, significantly below expectations of 115,000 and marking the lowest increase since March 2023. The ISM non-manufacturing index for May fell to 49.9 from 51.6 in April, indicating the first contraction in the services sector since June 2024. The Fed Beige Book also pointed to slightly decreased economic activity.
Investors attributed the market movements to concerns over the economic impact of President Donald Trump's trade policies, including the recent doubling of tariffs on imported steel and aluminum to 50%. Wednesday marked the deadline for U.S. trading partners to submit offers to avoid further tariffs, with the next major deadline set for July 9. Ongoing negotiations between the U.S. and major trading partners, particularly China, as well as expected talks between Trump and Chinese President Xi Jinping, added to uncertainty.
Sector performance was mixed. Technology shares supported the broader indexes, while companies such as Tesla fell 3.18% on weak European sales and CrowdStrike dropped 5.67% after issuing a downbeat revenue forecast. GlobalFoundries rose 1.5% after announcing plans to increase investments to $16 billion. Wells Fargo briefly hit a three-month high after the Federal Reserve lifted its $1.95 trillion asset cap, but ended down 0.4%. Dollar Tree dropped over 8% after warning of a potential 50% year-on-year decline in second-quarter adjusted profit due to tariff-driven volatility.
Other market indicators showed the euro rising 0.36% to $1.1412, West Texas oil falling 0.93% to $62.82, Brent crude down 1.15% to $64.90, the 10-year Treasury yield at 4.361%, and bitcoin declining 1.2% to $105,059. On the NYSE, advancing stocks outnumbered decliners by a 1.3-to-1 ratio, while on the Nasdaq the ratio was 1.18-to-1. Total market volume was 14.5 billion shares, below the 20-day average of 17.8 billion. Investors are now awaiting Friday's official nonfarm payrolls report for further labor market signals.
Written with ChatGPT (GPT-4).
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