Stocks showed little movement as U.S. officials made limited headway in trade negotiations, and new economic data pointed to increasing challenges.
The S&P 500 index remained unchanged at 5,970.81. The Dow Jones Industrial Average decreased by 91.90 points, or 0.2%, to close at 42,427.74. The Nasdaq Composite increased by 0.3%, or 61.53 points, to finish at 19,460.49.
President Donald Trump mentioned that he anticipated a call with Chinese leader Xi Jinping to discuss trade, but also noted potential difficulties. He expressed his sentiments on social media, acknowledging his positive relationship with President Xi but highlighting the toughness and challenges in reaching an agreement.
Investors are also waiting for the Labor Department’s upcoming monthly jobs report later in the week. This report could indicate whether businesses are delaying hiring decisions because of tariffs.
ADP, a payroll processor, reported that private-sector firms added only 37,000 jobs in May, which is the lowest number since March 2023. This figure fell significantly short of Wall Street’s projected 115,000 workers. Additionally, April’s figures were revised downward. While the ADP report is sometimes considered an early indicator of the official government release, it often varies.
Following the ADP report, President Trump criticized Federal Reserve Chair Jerome Powell on social media, urging him again to lower interest rates.
The bond market experienced a sell-off after the report’s release. The yield on 10-year U.S. Treasury notes increased by about 9.5 basis points to 4.365%. Bond yields typically decrease as prices increase, making fixed-income investments more appealing during economic slowdowns.
The nonpartisan Congressional Budget Office reported that Trump’s tax bill would increase deficits by $2.4 trillion over the next ten years. Analysts have cautioned that higher deficits could lead to increased interest rates, as the U.S. government would need to offer higher returns to attract investors to buy its debt.
A key indicator of business activity in the service sector fell below the growth threshold in April. The ISM Services PMI was at 49.9 in May, marking a one-year low and highlighting the impact of trade war uncertainty.
The Federal Reserve’s Beige Book indicated that economic activity had declined slightly since the previous report six weeks prior. The report stated that the outlook remains slightly pessimistic and uncertain.
In company news, CrowdStrike’s stock fell nearly 5% after missing sales estimates and receiving a downgrade from Bank of America analysts.
Dollar General Corporation and Dollar Tree reported quarterly results that exceeded expectations, but their shares declined. Dollar Tree’s stock fell by more than 8% in the late morning.
