The S&P 500 slipped slightly on Wednesday after new data showed an unexpected decline in private sector hiring, adding to investor unease about the health of the US economy.
The broad-market index dipped about 0.1%, while the Dow Jones Industrial Average fell 101 points, or 0.2%.
The Nasdaq Composite managed a modest gain of 0.2%, helped by continued strength in technology stocks.
According to payrolls processor ADP, private employers cut 33,000 jobs in June—the first monthly decline since March 2023.
Still, some analysts caution against reading too much into the ADP data, which has historically shown limited correlation with the official nonfarm payrolls report due Thursday.
Economists surveyed by Dow Jones expect the Labor Department to report a gain of 110,000 jobs in June.
Traders have started to modestly increase their bets on rate cuts, with the CME FedWatch tool now pricing in a 23% chance of a reduction at the Fed’s July meeting—up from 20% the previous day.
Private jobs decline
Private sector employment unexpectedly declined in June, according to data released Wednesday by payrolls processor ADP, raising fresh concerns about the strength of the US labor market just as investors push the S&P 500 back toward record highs.
The figure sharply missed economists’ expectations for a 100,000 gain, according to a Dow Jones poll.
In addition, ADP revised May’s job growth downward to 29,000 from the originally reported 37,000.
Nela Richardson, ADP’s chief economist, said the June losses stemmed more from employer caution than outright layoffs.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” she said.
The weaker-than-expected ADP data comes ahead of the US government’s official nonfarm payrolls report, due Thursday.
Economists surveyed by Dow Jones expect the Labor Department to report 110,000 new jobs for June.
Powell on rate cuts
Federal Reserve Chair Jerome Powell said Tuesday that the central bank would have already cut interest rates if not for the impact of President Donald Trump’s sweeping tariffs.
Speaking at the European Central Bank’s forum in Portugal, Powell noted that the Fed paused its policy easing plans after assessing the scale of the tariffs.
“We went on hold when we saw the size of the tariffs, and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs,” Powell said.
The Fed has kept its benchmark interest rate steady in the 4.25% to 4.5% range since December, holding off on cuts amid elevated inflation pressures.
Powell has faced repeated criticism from Trump, who has called the Fed chair “stupid” and publicly pushed for rate reductions.
Asked whether he would remain at the Federal Reserve once his term as chair ends next year, Powell declined to comment, saying, “I have nothing for you on that today.”
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