On Wednesday night, U.S. stock futures showed little movement as traders prepared for the highly anticipated June jobs report. The futures for the S&P 500 and Nasdaq 100 were slightly higher, while futures linked to the Dow Jones Industrial Average increased by 21 points, representing a gain of less than 0.1%. This cautious sentiment comes as investors reflect on the previous day's market performance.
Earlier in the trading day, the S&P 500 climbed by 0.47%, achieving a record close and setting a new all-time intraday high. Similarly, the Nasdaq Composite surged 0.94% to reach a record close, showcasing strong performance in tech stocks. In contrast, the Dow Jones, which consists of 30 prominent stocks, experienced a marginal decline of 0.02%.
The stock movements were influenced by a recent announcement from President Donald Trump via Truth Social. He revealed that the U.S. has established a trade deal with Vietnam, which includes a 20% tariff on imports from the Southeast Asian nation. Notably, goods that are routed through Vietnam for final shipment to the U.S. will incur a hefty 40% tariff. This news initially boosted market sentiment but was countered by concerns following a report from payroll processing firm ADP, which indicated that private sector hiring had decreased by 33,000 jobs last month.
Traders are now keenly awaiting the Bureau of Labor Statistics' June nonfarm payrolls report. Economists surveyed by Dow Jones forecast that approximately 110,000 jobs were added in June, a decline from May's gain of 139,000 jobs. Additionally, experts predict that the unemployment rate may rise slightly to 4.3%, compared to 4.2% in May.
Should June's jobs report fall short of expectations, market dynamics could shift, prompting a rotation away from speculative technology stocks toward more stable value names. Jay Hatfield, founder and CEO of Infrastructure Capital Advisors, noted that a disappointing jobs report could lead to broader market declines, as tech stocks represent approximately 40% of the overall market. "Tomorrow could be a little dicey," he told CNBC, highlighting the tradeoff between tech stocks declining and value stocks appreciating.
On the other hand, a disappointing jobs report might encourage the Federal Reserve to consider earlier interest rate cuts, possibly as soon as July, according to Hatfield. This prospect could further influence market trends as investors evaluate their strategies in light of evolving economic indicators.
In addition to job market concerns, investors are tracking the developments regarding Trump's tax megabill, which successfully passed the Senate on Tuesday. The bill is now back in the House, where negotiations among Republican lawmakers are reportedly intense.
As a reminder, Thursday will feature a shortened trading session, with both the New York Stock Exchange and the Nasdaq closing at 1 p.m. ET. Additionally, U.S. markets will be closed on Friday in observance of Independence Day.
