Wall St set for muted start after ADP shock; focus on trade, payrolls data
The ADP National Employment Report showed U.S. private payrolls fell unexpectedly in June and job gains in the prior month were smaller than initially thought.
Investors quickly increased their bets of a rate cut by the U.S. Federal Reserve in July to 27.4%, from about 20% prior to the report, according to LSEG data.
"I take it as a mixed bag. On one hand, the wage is still strong, which is terribly important to the U.S. economy. On the downside, if this isn't seasonality, this is the beginning of a long-term trend in white collar jobs that'll spill over into the total labor market," said Ross Mayfield, investment strategist at Baird.
"It would be very damaging for the overall economy and obviously make the Federal Reserve react despite their concerns about tariffs causing inflation."
The Nasdaq (.IXIC), opens new tab and the S&P 500 (.SPX), opens new tab closed lower in the previous session, retreating from record highs as tech stocks were pressured and Treasury yields climbed after data showed stronger-than-expected job openings in May.
Focus now turns to the more comprehensive non-farm payrolls report, scheduled for release on Thursday - a day earlier than usual, as markets are closed on Friday for Independence Day. The reading is expected to show U.S. job growth cooled in June and the unemployment rate ticked up to 4.3%, according to a Reuters poll of economists.
On trade, Trump said on Tuesday he was not thinking of extending the July 9 deadline for imposing tariffs and expressed doubts that an agreement could be reached with Japan, although he said he expected a deal with India. The European Union's trade chief is expected to hold talks this week with peers in Washington.
By 8:52 a.m. ET (1252 GMT), S&P 500 e-minis were down 10.75 points, or 0.17%, Nasdaq 100 e-minis dropped 91.75 points, or 0.4%, and Dow e-minis slipped 28 points, or 0.06%.
The blue-chip Dow (.DJI), opens new tab closed 1.3% below its record high touched in December.
U.S. Senate Republicans passed Trump's massive tax-and-spending bill on Tuesday by the narrowest of margins, advancing a package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending, while adding $3.3 trillion to the national debt.
The legislation now heads to the House of Representatives for possible final approval, although a handful of Republicans have already opposed some of the Senate provisions.
Among single stocks, Centene (CNC.N), opens new tab tumbled 31.2% premarket after the health insurer said it had withdrawn its 2025 earnings forecast after data showed a significant drop in expected revenue from its marketplace health insurance plans.
Shares of peers including Elevance Health (ELV.N), opens new tab, Molina Healthcare (MOH.N), opens new tab and UnitedHealth (UNH.N), opens new tab dipped in the range of 2.4% and 12.8%.
U.S. banking giants including JPMorgan Chase (JPM.N), opens new tab, Bank of America (BAC.N), opens new tab and Wells Fargo (WFC.N), opens new tab edged higher following announcements that they planned to raise third-quarter dividends after clearing the Fed's annual health check last week.
Verint Systems (VRNT.O), opens new tab soared 9.4% after Bloomberg News reported buyout firm Thoma Bravo was in talks to buy the call-center software maker.
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