Stocks Mixed as Tech Rallies, Investors Eye Jobs Data

Major U.S. stock indexes presented a mixed picture Wednesday, buoyed by tech gains and a new trade agreement even as employment data loomed large in investors’ minds.

S&P 500 Hits Record High

The S&P 500 index notched a fresh intraday high, while the Nasdaq Composite saw significant gains thanks to resurgent technology stocks. The Dow Jones Industrial Average, however, reversed course after an initial rally.

Specifically, the Nasdaq jumped 0.94% to close at 20,393.13 points, and the S&P 500 rose 0.47% to finish at 6,227.42 points after hitting an intraday peak of 6,227.60. Meanwhile, the Dow Jones slipped 0.02% to 44,484.42 points.

US, Vietnam Reach Trade Agreement

Optimism was fueled by a new commercial agreement between the United States and Vietnam. This is reportedly the third such “reciprocal” trade deal enacted since Donald Trump revealed his policies on April 2. The agreement eliminates customs rates on U.S. products, while imposing a 20% tariff on goods from the Asian nation.

Jobs Data in Focus

Market watchers are now turning their attention to upcoming employment data. Economists anticipate a cooling labor market. The US economy is projected to have added only 110,000 jobs in June. This is down from the 139,000 jobs created in May.

Adding to these expectations, the ADP report indicated a similar trend. As a result, investors are increasingly betting on a forthcoming interest rate cut by the Federal Reserve.

According to the Bureau of Labor Statistics, the U.S. unemployment rate remained at 4.0% in May 2024, with notable job gains in sectors such as health care, government, and leisure and hospitality (BLS, 2024).

Fed’s Next Move

“One of the reasons why the Fed has been so patient is that the job market is holding so well. If it changes, the Central Bank may be forced to act earlier than I would,” explained Chris Zaccarelli of Northlight Asset Management to Bloomberg.

Despite persistent signs of a cooling labor market, the Federal Reserve president has maintained that it remains solid. However, during the central bankers meeting in Sintra, he did not exclude the possibility of interest rate cuts at the next meeting.

Senate Approves Tax Package

Investors are also monitoring the fallout from the U.S. Senate’s approval of Trump’s tax megaplan. The project passed in the Senate, with the vice president breaking the tie. However, it still requires approval from the House of Representatives. The plan is projected to have a $3.3 billion impact on U.S. public accounts.

Individual Stocks in Motion

Among individual stocks, Tesla rebounded, rising 4.97% to $315.65, even after recent data showed a 13% drop in quarterly global sales. Microsoft shares edged down 0.20% to $491.09, following the announcement of 9,000 job cuts worldwide.

Centene experienced a significant drop, with shares plummeting 40.37% in what marked its worst day ever. This followed the company’s decision to withdraw its guidance for the remainder of the year, citing a marked slowdown in health insurance sales.