S&P 500 Soars! After Trump Seals Vietnam Trade Deal, U.S. Labor Market Shows Signs of Weakness
S&P 500 Soars! After Trump Seals Vietnam Trade Deal, U.S. Labor Market Shows Signs of Weakness
New York, July 3, 2025 — U.S. stocks closed higher on Wednesday, with the S&P 500 and Nasdaq Composite both hitting new all-time highs after President Donald Trump announced a new trade deal between the United States and Vietnam. Meanwhile, weaker-than-expected private payroll data raised hopes that the Federal Reserve might move to cut interest rates sooner than expected.
📈 Market Recap:
- S&P 500 gained 0.47% to close at 6,227.42, a new record high.
- Nasdaq Composite jumped 0.94% to finish at 20,393.13, also a historic high.
- Dow Jones Industrial Average dipped slightly by 10.52 points (−0.02%) to 44,484.42.
The rally was fueled in part by Trump’s announcement on Truth Social that the U.S. had reached a trade agreement with Vietnam, which includes a 20% tariff on Vietnamese imports. Shares of companies with large manufacturing bases in Vietnam, such as Nike, surged — with Nike climbing 4% on the day.
🧾 Weak Labor Market Raises Rate Cut Expectations:
ADP’s latest private payroll report revealed a surprising 33,000 job loss in June, far below expectations for a 100,000 job increase. This marks the first monthly decline in private sector employment since March 2023.
If Thursday’s nonfarm payroll report from the U.S. government confirms similar weakness, analysts say the Fed may accelerate plans to cut rates. According to the CME FedWatch Tool, market expectations for a July rate cut rose to 23%, up from 21% the previous day.
💬 Analysts: The Fed May Shift Focus to Labor Weakness
- “The labor market has been showing cracks for months now. A negative print might be what finally shifts the Fed’s attention away from just inflation,” said Ross Mayfield, investment strategist at Baird.
- Sam Stovall, chief investment strategist at CFRA Research, added: “If the government jobs report is also soft, the Fed is likely to move. They might have already cut rates earlier this year—if it weren’t for Trump’s tariff policy rollout in Q1.”
🏛️ Markets Watch Trump’s Tax and Budget Agenda Investors are also closely following Trump’s tax relief and spending bill, which narrowly passed the Senate and now moves to the House. The bill faces resistance even from within the Republican Party, adding another layer of uncertainty to the policy outlook.