US close: Macro fears spark rate-cut hopes, but stocks finish mixed
By Benjamin Chiou
Date: Wednesday 04 Jun 2025
(Sharecast News) - US stock markets finished mixed on Wednesday as investors digested a flurry of disappointing economic data, ongoing trade uncertainty and concerns about the fiscal outlook.
Supporting stocks, however, was an 11-basis point drop in the 10-year US Treasury yield to 4.539% - sparked by the weak data - which raised hopes that the Federal Reserve will step in to cut interest rates and spur economic activity over the coming months.
The Dow finished 0.2% lower after a positive start to 42,427.74, snapping a four-day winning streak; the S&P 500 was more or less flat at 5,9750.81; while the Nasdaq rose 0.3% to 19,460.49.
Jobs weakness
Wednesday's primary focus was news that private sector employment in the US rose less than expected in May, according to figures released on Wednesday by ADP. Employment increased by 37,000 from April, versus expectations for a 110,000 jump. Meanwhile, April's gain was revised from 62,000 to 60,000.
"Even for a report known more for misdirection than signal, it throws shade on the Tuesday JOLTS sugar high and casts a long shadow over Friday's main event: the government's official non-farm payrolls number," said Stephen Innes, managing partner at SPI Asset Management.
Regarding Friday's data, Innes said that a weaker-than-expected number could spark rate-cut hopes, "but the market's already gorged on that narrative". He added: "The bigger risk is that too soft a print resurrects recession ghosts-hence the S&P 500 hit altitude sickness as it approached the 6,000 mark."
Economic, geopolitical uncertainty dominates sentiment
Tensions between the US and China were still in focus after Donald Trump took to social media to say that Chinese president Xi Jinping was "very tough, and extremely hard to make a deal with!!!". Beijing urged the White House to "return to the right track" in trade negotiations.
Meanwhile, the US Senate has begun deliberations over Trump's massive tax cut bill, with majority leader John Thune already stating he believes that state and local tax deductions narrowly agreed upon by the House will have to change if the bill wants to have a chance of making its way through the Senate.
Elsewhere on the macro front, US mortgage applications decreased by 3.9% in the week ended 30 May, according to the Mortgage Bankers Association of America, following a 1.2% decline in the previous week. Applications to refinance a home loan fell by 4%, as did applications to purchase a home.
The ISM service-sector PMI showed an unexpected contraction in activity in May as tariffs raised price pressures and federal budget cuts affected purchasing decisions. The gauge came in at 49.9 for last month - marginally in negative territory, defined by any number under 50.0 - down from April's reading of 51.6 and the lowest reading since June 2024.
Also dampening sentiment was the May Beige Book survey, which found that all 12 of the Fed districts reported "elevated levels of economic and policy uncertainty, leading to a cautious approach". The Beige Book reported that six districts saw slight to moderate declines in economic activity, while three districts saw a stagnation, citing business planning complications as a result of tariff uncertainty. The three remaining districts saw slight growth.
Market movers
Dollar Tree sank 8% after disappointing Wall Street with its full-year guidance despite better-than-expected first-quarter earnings. The discount retailer said adjusted earnings per share would likely fall by as much as 50% year-on-year, principally due to the impact of higher tariffs stemming from Trump's ongoing global trade war.
Also spreading bad news was cyber giant Crowdstrike which pointed to revenues short of analysts' forecasts for the current quarter, and enterprise tech firm Asana which underwhelmed with tepid quarterly guidance.
Tesla was in reverse after the EV giant disappointed with sales data for May, which showed heavy falls in sales across Europe, such as slumps of nearly 70% in France and Portugal compared with last year.
Dow Jones - Risers
Dow Chemical Co. (DOW) $28.32 1.76%
Merck & Co. Inc. (MRK) $78.32 1.46%
Nike Inc. (NKE) $62.77 0.64%
Visa Inc. (V) $368.00 0.58%
Coca-Cola Co. (KO) $71.39 0.30%
Microsoft Corp. (MSFT) $463.87 0.19%
Walgreens Boots Alliance, Inc. (WBA) $11.25 0.18%
International Business Machines Corporation (CDI) (IBM) $265.53 0.12%
Cisco Systems Inc. (CSCO) $64.39 0.05%
Dowdupont Inc. (DWDP) $0.00 0.00%
Dow Jones - Fallers
Chevron Corp. (CVX) $137.37 -1.56%
Travelers Company Inc. (TRV) $272.10 -1.52%
Verizon Communications Inc. (VZ) $43.29 -1.35%
3M Co. (MMM) $146.86 -0.89%
Amgen Inc. (AMGN) $287.01 -0.88%
Johnson & Johnson (JNJ) $153.22 -0.78%
JP Morgan Chase & Co. (JPM) $264.22 -0.77%
Goldman Sachs Group Inc. (GS) $599.21 -0.77%
Boeing Co. (BA) $212.07 -0.68%
Walmart Inc. (WMT) $99.35 -0.63%
S&P 500 - Risers
FMC Corp. (FMC) $42.31 5.05%
Albemarle Corp. (ALB) $59.70 4.72%
D. R. Horton Inc. (DHI) $123.68 4.38%
Chipotle Mexican Grill Inc. (CMG) $52.16 4.17%
IQVIA Holdings Inc. (IQV) $147.92 3.59%
Seagate Technology Plc (STX) $127.64 3.58%
Lennar Corp. Class A (LEN) $110.28 3.36%
PulteGroup Inc. (PHM) $101.95 3.24%
Meta Platforms Inc. (META) $687.95 3.16%
TripAdvisor Inc. (TRIP) $14.44 2.81%
S&P 500 - Fallers
Dollar Tree Inc (DLTR) $88.62 -8.37%
Flowserve Corp. (FLS) $47.41 -6.16%
CenturyLink Inc. (LUMN) $3.91 -4.87%
Gap Inc. (GAP) $21.03 -4.23%
Bread Financial Holdings, Inc. (BFH) $50.02 -4.00%
Valero Energy Corp. (VLO) $126.54 -3.37%
ONEOK Inc. (OKE) $80.52 -3.27%
HF Sinclair Corporation (DINO) $35.60 -3.23%
Marathon Petroleum Corporation (MPC) $157.08 -3.10%
Phillips 66 Common Stock (PSX) $112.50 -3.01%
Nasdaq 100 - Risers
Seagate Technology Plc (STX) $127.64 3.58%
Meta Platforms Inc. (META) $687.95 3.16%
JD.com, Inc. (JD) $33.33 2.84%
Paypal Holdings Inc (PYPL) $72.80 2.06%
Netflix Inc. (NFLX) $1,239.66 1.78%
Starbucks Corp. (SBUX) $88.11 1.74%
Broadcom Inc. (AVGO) $261.08 1.65%
Illumina Inc. (ILMN) $83.16 1.63%
Electronic Arts Inc. (EA) $148.46 1.52%
eBay Inc. (EBAY) $77.10 1.51%
Nasdaq 100 - Fallers
Qvc Group Inc Series A (QVCGA) $2.27 -18.23%
Dollar Tree Inc (DLTR) $88.62 -8.37%
Tesla Inc (TSLA) $332.05 -3.55%
Trip.com Group Limited (TCOM) $61.63 -2.25%
Wynn Resorts Ltd. (WYNN) $86.14 -1.83%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $465.64 -1.58%
Monster Beverage Corp (MNST) $63.16 -1.30%
Biomarin Pharmaceutical Inc. (BMRN) $56.11 -1.20%
Mercadolibre Inc. (MELI) $2,573.96 -1.09%
Ross Stores Inc. (ROST) $142.51 -1.06%
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