S&P 500 ends with small gains; trade choppy on weak economic data

AWANI

The S&P 500 ended slightly higher on June 4, lifted by technology stocks despite volatile trading driven by weak U.S. economic indicators. A contraction in the services sector and a slowdown in private hiring highlighted ongoing concerns about economic growth and inflation. Investor sentiment was further shaped by escalating trade tensions, with President Trump's tariff deadlines and upcoming talks with China in focus. Despite the uncertainty, May marked the strongest monthly gains for the S&P 500 and Nasdaq since late 2023, prompting analysts like Barclays to raise their year-end forecasts.

Transcript

00:00Alright, for next update, the benchmark S&P 500 stock index ended modestly higher on Wednesday,

00:06supported by technology, shares, but some early gains evaporate as weak data revealed

00:12the economic toll taken by President Donald Trump's erratic trade policy.

00:16The services sector contracted in May for the first time in nearly a year,

00:21while businesses paid higher input prices,

00:23reminded that the economy was still at risk of slowing growth and rising inflation.

00:30The ADP National Employment Report showed U.S. private employers in May

00:34added the fewest number of workers in more than two years.

00:38We saw really weak ADP numbers come out this morning,

00:42along with very weak PMI, Purchasing Managers Index numbers,

00:47the weakest we've seen in roughly a year.

00:50That's driven bond yields down about 10 basis points across the curve,

00:56from twos all the way out to thirties.

00:59So, much lower yields on the day have led to a little bit higher stocks.

01:06Both the S&P, NASDAQ are a little bit higher today based on weak jobs numbers

01:12and the prospect that we'll see weak jobs numbers on Friday

01:15and the prospect that the Fed may very well cut 25, if not 50 basis points come September

01:22to head off unemployment.

01:25Investors await Friday's non-farm payrolls data for more signs on how trade uncertainty

01:32is affecting the U.S. labor market.

01:35Washington doubled tariffs on imported steel and aluminum to 50 percent,

01:39and Wednesday was also Trump's deadline for trading partners to make their best offers

01:44to avoid other punishing import levies from taking effect in early July.

01:48Investors focused on tariff negotiations between Washington and trading partners,

01:53with Trump and Chinese leader Xi Jinping expected to speak sometime this week

01:57as tensions and simmer between the world's two biggest economies.

02:02May saw the biggest monthly increases for the S&P 500 index

02:06and the tag-heavy Nasdaq since November 2023,

02:09thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.

02:13The S&P 500 remains more than 2 percent below-record highs touched in February.

02:20Barclays joined a slew of brokerages in raising its year-end price target for the S&P 500,

02:26pointing to easing trade uncertainty and expectations of normalized earnings growth in 2026.

02:31The S&P 500 gained 0.44 points or 0.01 percent to at-at-5,970.81 points,

02:40while the Nasdaq Composite gained 61.53 points or 0.32 percent to 19,460.49.

02:48The Dow Jones Industrial Average fell 91.9 points or 0.22 percent to 42,427.74.

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