S&P500 and Nasdaq 100: Tech Stocks Rally but ADP Miss Dampens Sentiment

Stocks

Summary:

Tech stocks lifted the S&P 500 and Nasdaq, with Nvidia leading gains, but weak ADP job data dampened sentiment and raised pressure on the Fed. Traders now eye Friday’s key payroll report.

Stocks Inch Higher as Soft Jobs Data Limits Gains

U.S. stocks posted modest gains shortly after the opening on Wednesday, with early enthusiasm tempered by a disappointing labor market report that raised concerns about economic momentum.

S&P500 and Nasdaq 100: Tech Stocks Rally but ADP Miss Dampens Sentiment_1

Daily E-mini S&P 500 Index

t 13:45 GMT, the Dow Jones Industrial Average added 60 points, or 0.17%, while the S&P 500 and Nasdaq Composite rose 0.26% and 0.34% respectively.

Private payrolls data from ADP showed the slowest job growth in over two years, increasing just 37,000 in May—well short of the 110,000 expected.

Could Weak ADP Jobs Data Pressure the Federal Reserve?

The soft labor print increases pressure on the Federal Reserve ahead of Friday’s nonfarm payrolls report, currently projected to show a gain of 125,000. President Donald Trump reignited his public feud with Fed Chair Jerome Powell, posting “Too Late Powell” and urging a rate cut shortly after the ADP data dropped. The market is now pricing in growing expectations for monetary easing if labor market weakness persists.

Tech Stocks Extend Gains as Nvidia Tops Microsoft Again

S&P500 and Nasdaq 100: Tech Stocks Rally but ADP Miss Dampens Sentiment_2

Daily NVIDIA Corporation

Technology stocks continued to underpin broader market strength. Nvidia rose nearly 3%, reclaiming its title as the most valuable public company and extending gains on Wednesday alongside Broadcom. The tech-heavy Nasdaq’s rally over recent sessions has reinforced trader confidence, despite ongoing concerns over tariffs and soft economic data.

Tariffs Back in Play After Court Reversal, but Traders Stay Focused on Earnings

Daily Hewlett Packard Enterprise Company

Despite temporary reinstatement of tariffs by a federal appeals court, traders appear more focused on corporate earnings. Hewlett Packard Enterprise jumped over 7% after beating estimates and raising guidance, citing minimal tariff impact. Thor Industries surged 12% on strong earnings and full-year guidance reaffirmation. However, CrowdStrike and Asana fell sharply after issuing revenue forecasts that fell short of expectations.

Sector Performance Mixed as Defensive Plays Lag

Sector-wise, Health Care led with a 0.97% gain, followed by Communication Services and Technology. Energy also climbed 0.46%, supported by firm oil prices. Defensive areas like Utilities and Consumer Staples lagged, down 1.04% and 0.44%, respectively, reflecting a shift toward risk-on sentiment.

What’s Next for Traders? All Eyes on Friday’s Jobs Report

The ADP miss has heightened the stakes for Friday’s government payroll data. A second weak print could push the Fed closer to a policy pivot. Traders should also monitor tariff developments and earnings reports, as market sentiment remains highly sensitive to both economic data and trade rhetoric.

Source: fxempire

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Thomas

Commodity

Having surged overnight and extended gains on a big crude draw (and trade-talk progress with the Europeans), oil prices are tanking now as Bloomberg reports that, according to people familiar with the matter, Saudi Arabia wants OPEC+ to continue with accelerated oil supply hikes in the coming months as it puts greater importance on regaining lost market share.

The kingdom, which holds an increasingly dominant position within OPEC+, wants the group to add at least 411,000 barrels a day in August and potentially September, the people said, asking not to be named because the information was private.

Riyadh is keen to unwind its cuts as quickly as possible to take advantage of peak demand during the northern hemisphere summer, one person said.

The reaction was instant, slamming WTI down 2%...

We would imagine Russia will not be pleased at this outburst (or the US shale producers or the Kazakhs), but Trump might be happy with what his old friends in The Kingdom are saying (and doing).

Crude prices are higher this morning on signs of progress in trade talks between the US and EU and the API report of a major drawdown in American crude inventories (despite product builds).

Geopolitical tensions continue to drive prices more aggressively as the possibility of a Putin-Zelensky meeting came and went and Iranian peace deal talks stumble.

The big question for traders is - will the official data confirm API's drawdown?

API

Crude -3.28mm
Cushing +952k
Gasoline +4.73mm
Distillates +761k

DOE

Crude -4.30mm
Cushing +576k
Gasoline +5.22mm
Distillates +4.23mm

The official data confirmed API's report with a large crude draw offset by big draws in products...

Source: Bloomberg

Even including the 509k barrel addition to the SPR, total crude stocks fell by the most since December...

Source: Bloomberg

The rig count continues to slide (now at its lowest since Dec 2021), and despite Trump's 'Drill, Baby, Drill' push, US crude production remains well of its highs...

Source: Bloomberg

WTI extended gains after the official data confirmed API's...

Source: Bloomberg

Oil rose at the start of the week after a decision by OPEC+ to increase production in July was in line with expectations, easing concerns over a bigger hike.

However, prices are still down about 11% this year on fears around a looming supply glut, while traders continue to monitor US trade tariffs as President Donald Trump said his Chinese counterpart is “extremely hard” to make a deal with.

Saudi Arabia led increases in OPEC oil production last month as the group began its series of accelerated supply additions, according to a Bloomberg survey.

Nevertheless, the hike fell short of the full amount the kingdom could have added under the agreements.

Source: Zero Hedge

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Warren Takunda

Economic

President Donald Trump’s big bill making its way through Congress will cut taxes by $3.7 trillion but also increase deficits by $2.4 trillion over the next decade, according to an analysis released Wednesday by the nonpartisan Congressional Budget Office.

The CBO also estimates an increase of 10.9 million people without health insurance under the bill, including 1.4 million who are in the country without legal status in state-funded programs. The package would reduce federal outlays, or spending, by $1.3 trillion over that period, the budget office said.

The analysis comes at a crucial moment in the legislative process as Trump is pushing Congress to have the final product on his desk to sign into law by Fourth of July. The work of the CBO, which for decades has served as the official scorekeeper of legislation in Congress, will be weighed by lawmakers and others seeking to understand the budgetary impacts of the sprawling 1,000-page plus package.

Ahead of CBO’s release, the White House and Republican leaders criticized the budget office in a pre-emptive campaign designed to sow doubt in its findings.

White House Press Secretary Karoline Leavitt said CBO has been “historically wrong” and Senate Majority Leader John Thune said the CBO was “flat wrong” because it underestimated the potential revenue from Trump’s first round of tax breaks in 2017. The CBO last year said receipts were $1.5 trillion or 5.6% greater than predicted, in large part because of the “burst of inflation” during the COVID-19 pandemic in 2021.

Leavitt also suggested that CBO’s employees are biased, even though certain budget office workers face strict ethical rules — including restrictions on campaign donations and political activity — to ensure objectivity and impartiality.

Alongside the costs of the bill, the CBO had previously estimated that 8.6 million people would no longer have health care and 4 million fewer would have food stamps each month due to the legislation’s proposed changes to Medicaid and other programs.

The bill, called the “One Big Beautiful Bill Act” after the president’s own catch phrase, is grinding its way through Congress, as the top priority of Republicans, who control both the House and Senate — and face stiff opposition from Democrats at every step in the process.

Democrats call it Trump’s “big, ugly bill.”

All told, the package seeks to extend the individual income tax breaks that had been approved in 2017, but will expire in December if Congress fails to act, while adding new ones, including no taxes on tips. It also includes a massive buildup of $350 billion for border security, deportations and national security.

To help cover the lost revenue, Republicans want to slash some federal spending. They propose phasing out green energy tax breaks put in place during Democrat Joe Biden's presidency. New work requirements for some adults up to age 65 on Medicaid and the Supplemental Nutrition Assistance Program, known as SNAP, would begin in December 2026 and is expected to result in less spending on those programs.

The package also would provide a $4 trillion increase to the nation’s debt limit, which is now $36 trillion, to allow more borrowing. The Treasury projects the debt limit will need to be raised this summer to pay the nation’s already accrued bills.

Now in its 50th year, the CBO was established by law after Congress sought to assert its control, as outlined in the constitution, over the budget process, in part by setting up the new office as an alternative to the White House’s Office of Management and Budget.

Staffed by some 275 economists, analysts and other employees, the CBO says it seeks to provide the Congress with objective, impartial information about budgetary and economic issues.

Its current director, Phillip Swagel, a former Treasury Department official in Republican President George W. Bush’s administration, was reappointed to a four-year term in 2023.

Source: AP

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Stocks

U.S. stocks edged higher on Wednesday, as strength in technology shares offset declines driven by weak economic data that deepened concerns about the impact of the Trump administration's erratic trade policies.

The U.S. services sector contracted for the first time in nearly a year in May, while businesses paid higher input prices, a reminder that the economy was still at risk of experiencing a period of very slow growth and high inflation.

The ADP National Employment Report showed U.S. private employers added the fewest number of workers in more than two years in May. Investors are awaiting Friday's nonfarm-payrolls data for more signs on how trade uncertainty is affecting the U.S. labor market.

"I think you get very short term volatility from the ADP number, but I don't think that it means that much until we see the payrolls number," said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

Washington doubled tariffs on imported steel and aluminum to 50% on Wednesday, the same day by which President Donald Trump wanted trading partners to make their best offers to avoid other punishing import levies from taking effect in early July.

Investor focus is squarely on tariff negotiations between Washington and its trading partners, with Trump and Chinese leader Xi Jinping expected to speak sometime this week as tensions simmer between the world's two biggest economies.

May was the best month for the S&P 500 index and the tech-heavy Nasdaq since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.

The S&P 500 remains less than 3% away from its record highs touched in February.

Barclays joined a slew of other brokerages in raising its year-end price target for the S&P 500, pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026.

At 10:36 a.m. ET, the Dow Jones Industrial Average rose 88.09 points, or 0.20%, to 42,605.07, the S&P 500 gained 17.36 points, or 0.29%, to 5,987.73 and the Nasdaq Composite gained 58.41 points, or 0.31%, to 19,459.09.

Eight of the 11 major S&P 500 sub-sectors rose, led by communication services with a 1.2% rise, while information technology stocks gained 0.4%.

Shares of Hewlett Packard Enterprise rose 1.1% as demand for the company's artificial-intelligence servers and hybrid cloud segment helped it beat estimates for second-quarter revenue and profit.

GlobalFoundries rose 2.2% after the chip manufacturer announced plans to increase its investments to $16 billion.

Tesla dropped 3.8%. The electric-vehicle maker's sales dropped for the fifth straight month in big European markets.

Wells Fargo shares rose 1.2% after the U.S. Federal Reserve removed a $1.95 trillion asset cap imposed in 2018 following years of missteps.

Shares of cybersecurity firm CrowdStrike slumped 4.7% after it forecast quarterly revenue below estimates.

Dollar Tree fell 10.2% after the discount store operator forecast second-quarter adjusted profit would be as much as 50% lower than a year ago due to tariff-driven volatility.

Advancing issues outnumbered decliners by a 2.02-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq.

The S&P 500 posted 19 new 52-week highs and no new lows while the Nasdaq Composite recorded 63 new highs and 23 new lows.

Source: Reuters

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James Whitman

Economic

The nonpartisan Congressional Budget Office on Wednesday lowered its estimate of how much President Donald Trump's tax-cut and spending bill will add to the national debt, saying it would add about $2.4 trillion to the $36.2 trillion pile.

Its assessment comes a day after key Trump ally Elon Musk blasted the bill as a "disgusting abomination," giving fresh support to Republican deficit hawks who have been pushing back against the measure.

An earlier CBO estimate predicted the Republican bill, which passed on May 22 with no Democratic support, would add around $3.8 trillion to Washington's debt over the next decade.

The House-passed bill would reduce the federal government's revenues by $3.67 trillion over a decade, the CBO forecasted, while reducing spending by $1.25 trillion.

The number of people in the United States without health insurance would increase by 10.9 million by 2034 due to policy changes in the House bill, the CBO said. Of that number, an estimated 1.4 million people would be undocumented immigrants who no longer would be covered in programs funded by the states.

The CBO update does not include a forecast on the potential macroeconomic effects of the legislation, which will be forthcoming. Republicans argue that extending existing tax cuts and adding new breaks, which are included in the House bill, would further stimulate the economy.

They made similar arguments in 2017 that the tax cuts would pay for themselves by stimulating economic growth, but the CBO estimates the changes increased the federal deficit by just under $1.9 trillion over a decade, even when including positive economic effects.

The 1,100-page bill would extend corporate and individual tax cuts passed in 2017 during Trump's first term in office, cancel many green-energy incentives passed by Democratic former President Joe Biden and tighten eligibility for health and food programs for the poor. It also would fund Trump's crackdown on immigration, adding tens of thousands of border guards and creating the capacity to deport up to 1 million people each year. Regulations on firearm silencers would be loosened.

Democrats blast the bill as disproportionately benefiting the wealthy while cutting benefits for working Americans. The measure is now awaiting action in the Senate.

The new CBO estimate takes into account late changes that were made to the bill as Republican leaders steered it to passage.

PLAYING DOWN MUSK

The White House and top congressional Republicans tried to play down the objections of Musk, who joined Trump's team with brash promises of cutting $2 trillion in spending from the federal budget, but left last week having accomplished a small fraction of that.

Republican Senate Majority Leader John Thune, speaking to reporters, tried to minimize the damage, saying, "We obviously respect everything that Elon did with DOGE. On this particular issue, we have a difference of opinion."

The updated analysis is expected to help guide the Republican-controlled Senate, which is now grappling with putting together its own version of the legislation in coming weeks.

With Republicans holding a narrow 53-47 Senate majority, warring camps within the party are vying for changes to the House-passed bill. Some have been pushing to scale back the more than $700 billion in savings to Medicaid or to remove costly Trump-backed tax cuts for those earning overtime pay and tipped wages or income from Social Security retirement payments.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Commodity

Oil gained on signs of progress in trade talks between the US and EU and an industry group report of a major drawdown in American crude inventories.

West Texas Intermediate advanced toward $64 a barrel after a US trade envoy said that trade negotiations with the European Union were “advancing quickly.”

In the US, the American Petroleum Institute reported that crude inventories dropped 3.28 million barrels last week. That would be the biggest drawdown since March if confirmed by official data later on Wednesday.

Limiting the rally, one Canadian operator restarted a site that had been shut down by fires. Blazes in Alberta had halted about 7% of Canada’s oil output at one point.

Prices eased earlier after Ukrainian President Volodymyr Zelenskiy said he’s ready to meet with Russia’s Vladimir Putin even without a ceasefire monitoring mechanism. The slide was compounded by US data showing that hiring decelerated to the slowest pace in two years.

Oil rose at the start of the week after a decision by OPEC+ to increase production in July was in line with expectations, easing concerns over a bigger hike. However, prices are still down about 11% this year on fears around a looming supply glut, while traders continue to monitor US trade tariffs as President Donald Trump said his Chinese counterpart is “extremely hard” to make a deal with.

Saudi Arabia led increases in OPEC oil production last month as the group began its series of accelerated supply additions, according to a Bloomberg survey. Nevertheless, the hike fell short of the full amount the kingdom could have added under the agreements.

The OECD, meanwhile, cut its outlook for global economic growth on Tuesday, with the US among the hardest hit. Trump is pushing ahead with his tariffs, signing a directive that doubles rates on steel and aluminum.

source : Bloomberg

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Warren Takunda

Economic

China–U.S. Trade War

The Bank of Canada on Wednesday held its key benchmark rate at 2.75%, citing the need to probe the effects of U.S. trade policy, but said another cut might be necessary if the economy weakened in the face of tariffs.

The decision marks the second time in a row that the central bank has remained on the sidelines after an aggressive cutting cycle which shrunk rates by 225 basis points over nine months.

"The trade conflict initiated by the United States remains the biggest headwind facing the Canadian economy," Governor Tiff Macklem told a news conference, describing U.S. trade policy as highly unpredictable.

"There was a clear consensus to hold policy unchanged as we gain more information," he said.

U.S. President Donald Trump on Wednesday doubled the tariff on imports of Canadian steel and aluminum to 50%.

The bank says it is weighing upward pressure on inflation from higher prices and downward pressure from sluggish growth.

Macklem said the Canadian economy had been softer but not sharply weaker, while noting that underlying inflation might be stronger than the bank had suspected.

"On balance, members thought there could be a need for a reduction in the policy rate if the economy weakens in the face of continued U.S. tariffs and uncertainty, and cost pressures on inflation are contained," he said.

Currency swap markets bets showed that the odds of another hold on July 30 were around 54%. The July decision will also be accompanied by the bank's monetary policy report.

The Canadian dollar firmed further and was trading up 0.14% to 1.3698 to the U.S. dollar or 73 U.S. cents.

Canada's annual inflation rate fell to 1.7% in April due to a drop in energy prices, but closely tracked core measures of inflation rose above the bank's target range of 1% to 3% in the same month.

"Higher core inflation can be partly attributed to higher goods prices, including food, and may reflect the effects of trade disruption," Macklem said.

Yeah, without everything else that's going on, this is a big worry, because one of the sectors that we were hoping would start to outperform,

Economists had predicted the bank would most likely hold its key policy rate in June, seeking to prevent higher inflation.

Macklem said recent surveys showed consumers were bracing for higher prices and many businesses say they intend to pass on tariff costs.

Lingering uncertainty on the impact of tariffs, the outcome of trade negotiations and new trade actions means the bank will be less forward looking, Macklem said, repeating his comments from April.

"Faced with unusual uncertainty, Governing Council is proceeding carefully, with particular attention to the risks," he said, adding that the BoC would continue to support economic growth while ensuring inflation remained under control.

First-quarter growth was better than expected but the business investment and domestic spending were largely subdued. Economists predict this trend is likely to continue, and Macklem said second quarter growth would be substantially weaker.