S&P 500 hits new record after Trump announces Vietnam tariff deal; Nike and Tesla lead gains
On Wednesday, a surprise drop in US private payrolls heightened expectations for a potential interest rate cut this month.
At the same time, the S&P 500 hit a new record high, driven by news of a US–Vietnam trade agreement and strong gains in major consumer and tech stocks.
According to ADP, US private sector employment fell by 33,000 jobs in June—the first monthly decline since March 2023—against forecasts of a 100,000 job increase.
Nela Richardson, chief economist at ADP, stated that “though [US] layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month.”
Economists are now watching for Thursday’s US nonfarm payroll report, which is expected to show a gain of 110,000 jobs.
However, as reported by CNBC, the ADP release has a mixed track record in predicting the official figure.
According to CFRA Research's Sam Stovall, a weaker-than-expected government jobs report could push the US Federal Reserve to lower interest rates at its July meeting.
Stovall added that Fed Chair Jerome Powell had already indicated the central bank would have cut rates if not for earlier tariff announcements from US President Donald Trump.
The CME Group’s FedWatch tool showed the probability of a rate cut this month rising to roughly 23 percent from nearly 21 percent the day prior.
The US labour market backdrop coincided with gains in US equities. The S&P 500 climbed 0.47 percent to a record close of 6,227.42, while the Nasdaq Composite advanced 0.94 percent to end at 20,393.13.
The Dow Jones Industrial Average edged down by 10.52 points to close at 44,484.42, as per BNN Bloomberg.
Tesla rose 5 percent after announcing nearly 374,000 Model 3 and Model Y deliveries last quarter—above analyst expectations, though overall sales were down 13 percent year-over-year.
Trump’s announcement of a US-Vietnam trade agreement also lifted market sentiment.
The deal includes a 20 percent tariff on Vietnamese imports and zero tariffs on US exports, according to Trump’s post on Truth Social.
Nike, which produces half its footwear in Vietnam, saw its stock climb 4.1 percent following the announcement.
Constellation Brands gained 4.5 percent despite posting a weaker quarterly profit than expected, citing slowing job growth in construction and other sectors. The company reaffirmed its full-year guidance.
Centene shares plunged 40.4 percent after it withdrew profit forecasts due to worsening sickness trends across its markets, marking its worst trading day since its 2001 debut.
Bond markets reflected mixed signals ahead of Thursday’s US employment data.
The yield on the 10-year Treasury rose to 4.28 percent from 4.26 percent, while the two-year yield held at 3.78 percent, as reported by CNBC.
Goldman Sachs economist David Mericle warned that the end of protected status for 350,000 Venezuelans could reduce US payrolls by 25,000 jobs, adding further downside risk to the June data.
According to BNN Bloomberg, Canada’s S&P/TSX Composite Index rose 12.55 points to 26,869.66 on Wednesday, supported by strength in consumer cyclicals.
The Canadian dollar traded at 73.41 cents US, up slightly from 73.30 cents US on Monday.
In commodities, the August crude oil contract gained US$2.00 to reach US$67.45 per barrel, while August gold rose US$9.90 to US$3,359.70 an ounce.
Global markets were mixed as tariff uncertainty weighed.
France’s CAC 40 gained one percent, Hong Kong’s Hang Seng rose 0.6 percent, while Japan’s Nikkei 225 fell 0.6 percent and South Korea’s Kospi dropped 0.5 percent.
According to CNBC, traders also monitored Trump’s tax-and-spending bill, which passed the US Senate narrowly and now faces a divided House.
