S&P Futures Gain With Focus on U.S. ADP Jobs Report and Fed Speak

June S&P 500 E-Mini futures (ESM25) are trending up +0.22% this morning, extending yesterday’s gains, while investors await comments from Federal Reserve officials and further data on the labor market, which has thus far remained resilient despite the Trump administration’s trade war.

Investors also await a potential call between U.S. President Donald Trump and Chinese President Xi Jinping this week in hopes of easing tensions. Still, President Trump said Wednesday that his Chinese counterpart was “extremely hard” to strike a deal with. Also, President Trump doubled steel and aluminum tariffs to 50%, delivering on a promise to raise U.S. import duties in support of domestic manufacturers. Trump framed the move, which took effect at 12:01 a.m. Washington time on Wednesday, as essential to safeguard national security.

In yesterday’s trading session, Wall Street’s three main equity benchmarks closed higher. Dollar General (DG) surged over +15% and was the top percentage gainer on the S&P 500 after the retailer posted upbeat Q1 results and raised its full-year sales growth guidance. Also, chip stocks advanced, with ON Semiconductor (ON) climbing more than +11% to lead gainers in the Nasdaq 100 and Microchip Technology (MCHP) rising over +6%. In addition, MoonLake Immunotherapeutics (MLTX) soared more than +17% after the Financial Times reported that Merck held talks to acquire the biotechnology company. On the bearish side, Kenvue (KVUE) slumped over -6% and was the top percentage loser on the S&P 500 after CEO Thibaut Mongon cautioned that seasonal demand was lagging both last year and the company’s expectations.

A Labor Department report released on Tuesday showed that U.S. JOLTs job openings unexpectedly rose to 7.391M in April, stronger than expectations of 7.110M. At the same time, U.S. April factory orders fell -3.7% m/m, weaker than expectations of -3.1% m/m and the biggest decline in 15 months.

“The higher-than-expected job openings number is a good sign for the economy, as many were worried that the tariff uncertainty was weighing too heavily on businesses,” said Chris Zaccarelli at Northlight Asset Management. 

Atlanta Fed President Raphael Bostic said on Tuesday that he is in no hurry to lower interest rates, noting he wants to see “a lot” more progress on inflation. “There’s still a ways to go in terms of the progress that we’re going to need to see,” Bostic said. Also, Chicago Fed President Austan Goolsbee said that higher inflation from U.S. tariffs could show up quickly, though it would take more time to observe a tariff-driven economic slowdown. In addition, Fed Governor Lisa Cook said she views tariffs as potentially fueling inflation and weakening employment, while emphasizing the importance of price stability in guiding future rate adjustments.

Meanwhile, U.S. rate futures have priced in a 98.7% chance of no rate change and a 1.3% chance of a 25 basis point rate cut at the June FOMC meeting.

Today, investors will focus on the U.S. ADP Nonfarm Employment Change data, which is set to be released in a couple of hours. Economists, on average, forecast that the May ADP Nonfarm Employment Change will stand at 111K, compared to the April figure of 62K.

The U.S. ISM Non-Manufacturing PMI and S&P Global Services PMI will also be closely monitored today. Economists expect the May ISM services index to be 52.0 and the S&P Global services PMI to be 52.3, compared to the previous values of 51.6 and 50.8, respectively.

U.S. Crude Oil Inventories data will be released today as well. Economists expect this figure to be -2.900M, compared to last week’s value of -2.795M.

In addition, market participants will hear perspectives from Fed Governor Lisa Cook and Atlanta Fed President Raphael Bostic throughout the day.

Later today, the Fed will release its Beige Book survey of regional business contacts, which provides an update on economic conditions in each of the 12 Fed districts. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.

On the earnings front, notable companies like Dollar Tree (DLTR), MongoDB (MDB), and Five Below (FIVE) are set to report their quarterly figures today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.467%, up +0.11%.

The Euro Stoxx 50 Index is up +0.69% this morning, buoyed by Germany’s tax relief package aimed at boosting the region’s largest economy. Mining and technology stocks led the gains on Wednesday. The German cabinet on Wednesday approved a first tax relief package totaling 46 billion euros ($52.43 billion) for the period from 2025 to 2029 to aid businesses and reinvigorate its sluggish economy. Still, trade remains a concern for many investors. U.S. President Donald Trump signed a proclamation to double tariffs on steel and aluminum, and the European Union criticized the move, cautioning that it could jeopardize ongoing trade talks and reaffirming its readiness to introduce countermeasures if needed. Also, Wednesday marks the deadline for U.S. trading partners to present their “best offers” for trade deals that could potentially help them avoid Trump’s sweeping tariffs from taking effect. Meanwhile, a survey released on Wednesday showed that Eurozone business activity saw minimal growth in May as the dominant services sector shrank for the first time since November, pressured by waning demand. Investor focus now shifts to the European Central Bank’s rate-setting meeting on Thursday, with the central bank widely expected to lower the deposit rate by another 25 basis points to 2.00%. In corporate news, Airbus SE (AIR.FP) gained over +3% after Bloomberg reported that Chinese airlines were considering ordering hundreds of the company’s aircraft as soon as next month.

Eurozone’s Composite PMI and Eurozone’s Services PMI data were released today.

Eurozone’s May Composite PMI arrived at 50.2, stronger than expectations of 49.5.

Eurozone’s May Services PMI came in at 49.7, stronger than expectations of 48.9.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.42%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.80%. 

China’s Shanghai Composite Index ended higher today on optimism that a call between U.S. and Chinese leaders could help ease trade tensions. Technology and brokerage stocks gained ground on Wednesday. Rare earth stocks also surged. The export of rare earths has been pushed into the spotlight in the U.S.-China trade negotiations. Investor concerns over the latest U.S.-China dispute concerning access to chips and rare earths were slightly alleviated by the possibility of a call between U.S. President Donald Trump and Chinese leader Xi Jinping later this week. The U.S. reiterated on Tuesday that Trump and his Chinese counterpart will speak “very soon,” although Beijing has yet to confirm it. Analysts noted that direct talks between Xi and Trump could help ease tensions between the world’s largest economies after both countries accused each other of breaching a trade deal struck in May. Meanwhile, Trump said Wednesday that Xi was very difficult to strike a deal with, even as he reaffirmed his personal admiration for the Chinese leader. “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!” Trump said in a late-night social media post. In other news, Bloomberg reported on Wednesday that Chinese carriers are weighing plans to order up to 300 narrowbody and widebody aircraft from Airbus SE as early as next month. In corporate news, BYD rose over +1% after several of its car models were selected for a government initiative aimed at boosting sales of green-energy vehicles in rural regions.

Japan’s Nikkei 225 Stock Index closed higher today, snapping a 3-session losing streak as overnight gains on Wall Street boosted sentiment. A weaker yen also bolstered investors’ risk appetite. Chip stocks climbed on Wednesday, tracking overnight gains in their U.S. counterparts amid renewed enthusiasm for the AI trade. Machinery stocks also advanced. A private sector survey released on Wednesday showed that growth in Japan’s service sector activity eased in May due to softer demand, doing little to offset declining factory activity and resulting in near-zero overall business growth. Meanwhile, Bank of Japan Governor Kazuo Ueda said on Tuesday that the country’s economy is capable of weathering the impact of U.S. tariffs and maintaining a cycle of rising inflation supported by wage growth. On the trade front, White House spokeswoman Karoline Leavitt said on Tuesday that the U.S. had requested countries to submit their best trade negotiation offers by Wednesday. Even so, Japan has not received a letter from the U.S. asking for its best proposals on trade talks, Chief Cabinet Secretary Yoshimasa Hayashi said on Wednesday. In other news, the Yomiuri newspaper reported that Japan’s junior ruling coalition partner, Komeito, plans to propose lowering the consumption tax rate on food items to 5% from 8% as part of its campaign pledge for the upper house election scheduled for July. In corporate news, Toyota Industries plunged over -11% after automaker Toyota Motor announced plans to take the forklift-maker private in a $33 billion deal, significantly below the valuation suggested in earlier media reports. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -4.76% to 23.40.

The Japanese May au Jibun Bank Services PMI arrived at 51.0, stronger than expectations of 50.8.

Pre-Market U.S. Stock Movers

Hewlett Packard Enterprise (HPE) climbed more than +5% in pre-market trading after the company posted upbeat FQ2 results and raised the lower end of its full-year adjusted EPS guidance.

Wells Fargo (WFC) gained over +3% in pre-market trading after the Federal Reserve lifted the asset cap imposed in 2018 following a fake-accounts scandal.

Snowflake (SNOW) rose more than +2% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $265.

CrowdStrike Holdings (CRWD) slumped over -6% in pre-market trading after the cybersecurity company reported weaker-than-expected Q1 revenue and issued below-consensus Q2 revenue guidance.

Apple (AAPL) fell about -0.6% in pre-market trading after Needham downgraded the stock to Hold from Buy.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - June 4th

Dollar Tree (DLTR), MongoDB (MDB), Descartes Systems (DSGX), Five Below (FIVE), Thor Industries (THO), PVH (PVH), Argan (AGX), Greif Bros (GEF), Sprinklr (CXM), Rev Group (REVG), Planet Labs PBC (PL), Verint (VRNT), Jiayin (JFIN), VersaBank (VBNK), ChargePoint Holdings (CHPT), Lovesac (LOVE), Genesco (GCO), BARK (BARK).