Stock market hits new highs as Vietnam trade deal, labor slowdown fuel rate cut hopes
U.S. stocks climbed to fresh record highs on Wednesday, fueled by optimism over a newly announced trade deal with Vietnam and signs of a cooling labor market that could push the Federal Reserve toward interest rate cuts.
The S&P 500 (^GSPC) rose nearly 0.5% to a record close of 6,277.42, while the Nasdaq Composite (^IXIC) jumped more than 0.9% to finish at a new high of 20,393.13. The Dow Jones Industrial Average (^DJI) was little changed, News.Az reports, citing foreign media.
Apple (AAPL) stock gained after receiving an upgrade from Jefferies analysts, and Tesla (TSLA) shares rose as the company exceeded expectations for global vehicle production in Q2, despite a sharp drop in sales.
Market sentiment improved further after former President Donald Trump announced a trade deal with Vietnam, giving investors hope that more international agreements may follow ahead of the July 9 tariff pause deadline.
At the same time, economic data revealed signs of a labor market slowdown. ADP reported that private employers unexpectedly cut 33,000 jobs in June, marking the first private-sector job losses in over two years and sharply missing expectations of 98,000 gains.
The disappointing data raises the stakes for Thursday’s official June jobs report, which could heavily influence the Fed's next move. While most investors don’t expect a rate cut in July, more than 20% now anticipate two rate cuts by September, according to CME Group data.
With trade optimism and softer labor data combining to lift equities, all eyes now turn to the Fed’s response in the months ahead.
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