Today, the US stock market showed mixed signals. As the new quarter begins, funds have shifted from technology stocks to small-cap stocks, resulting in strong net buying. News of President Trump's massive budget proposal passing through the Senate and the halt of trade negotiations influenced the S&P 500 index, which experienced intra-day volatility and dropped by 0.8%. The higher-than-expected job openings report undermined expectations for an early rate hike by the Fed, leading to rising Treasury yields. According to Alan Bassmunt from Valspark, while this could indicate the start of a long-term trend reversal, it is too early to judge based on just one day’s movement.
Overview
The economic indicators sent mixed signals. The job openings for May hit the highest level since November last year, confirming the recovery in the labor market. However, the June ISM Manufacturing PMI showed a continued decline in new orders and employment, remaining in a contraction phase for four consecutive months, suggesting persistent weakness in the manufacturing sector. At a meeting in Portugal, Ferraz mentioned that without the tariff expansion measures from President Trump, the Fed would have raised rates again this year, yet he did not rule out the possibility of a July rate hike being too early.
Meanwhile, President Trump stated he has no plans to extend the March tariff suspension and threatened to impose new taxes while halting negotiations with several countries. Tesla's stock fell by over 5% as tensions between President Trump and Elon Musk resurfaced. In response to Musk's criticism, Trump stated via social media that he would demand an investigation into Musk's government subsidies. Investors are focusing on the upcoming February non-farm payroll report expected next week, with the market anticipating a slight uptick in employment and unemployment rates.
According to Ben Schwartz from Ameriprise, the preference for risk in stocks with long-term growth drivers like AI has waned over the past two months. Analysts from Amigo Americas pointed out that major indices have reached overbought conditions in recent weeks. If the economy continues to grow and stagflation risks diminish, the Fed is expected to take more time in its interest rate decisions.
| Time | Economic Indicator |
|---|---|
| 20:00 | US NBA Mortgage Applications |
| 20:15 | US ADP Non-Farm Employment Change |
| 23:30 | US EI-1 Maintenance Rate |
In summary, the US stock market showed mixed performance today, and the economic indicators to be released tomorrow are likely to be significant variables. We must closely monitor how these upcoming economic reports impact the Fed's interest rate policy and the market's reactions.
| NasDaq | S&P 500 |
| Dow Jones | Won/Dollar |
