Markets Steady Ahead of Jobs Report and Fiscal Policy Developments

Image Source : Krish Capital Pty Ltd

Index Update:  U.S. stock futures edged slightly higher as investors awaited the June jobs report and the anticipated passage of President Trump’s tax and spending bill, which is expected to boost fiscal policy. However, optimism around job growth was dampened by a weaker-than-expected ADP employment report. Trade negotiations appeared stalled ahead of a looming deadline, following the imposition of 20% tariffs on Vietnam. On the corporate front, BlackRock futures were flat amid reports of a potential sale of its leasing rights to Aramco’s gas pipeline, while Carlyle is reportedly set to sell Dainese to HPS.

Market Movers:  On Wednesday, the top gainers were Sonnet BioTherapeutics Holdings, Inc (+242.98%), followed Blue Gold Limited (+84.85%). On the contrary Pelthos Therapeutics Inc (-87.78%) and Centene Corporation (- 40.37%) declined the most the same day.

Commodities Update:  Crude oil prices fell as a surprise build in U.S. crude inventories raised concerns about weakening demand. WTI dipped below $67 and Brent neared $68 per barrel after official data showed a 3.85 million barrel increase in stockpiles, the largest in three months. Pressure was compounded by OPEC+ plans to boost output by 411,000 bpd in August, raising total 2025 additions to 1.78 million bpd. This reversed some of Wednesday’s gains driven by geopolitical tensions from Iran halting cooperation with the UN nuclear watchdog and optimism over a new U.S.-Vietnam trade deal. Gold prices steadied around $3,350 per ounce, pausing their upward trend as improved trade sentiment reduced the metal’s safe-haven demand. The U.S.-Vietnam agreement, which eased tariffs and opened access to markets, fueled optimism for further deals. However, gold found support from a weaker U.S. dollar and expectations of continued monetary easing, especially after ADP data showed a surprise decline in private-sector jobs, raising concerns about the labor market's health.

Macro Update:  The dollar index remained below 97, near three-year lows, as markets awaited key economic updates to assess their impact on U.S. monetary and fiscal policy. Weaker-than-expected ADP job data dampened expectations for strong payrolls, raising the possibility of earlier Fed rate cuts. Meanwhile, progress on President Trump's tax and spending bill, expected to widen the deficit by over $3 trillion, moved forward in Congress. Trade deal updates were also awaited ahead of the July 9 tariff deadline, with talks facing setbacks despite reduced tariffs on Vietnam. The dollar found some support from a weaker pound amid UK fiscal uncertainty.

Bonds Commentary:  The 10-year U.S. Treasury yield eased to 4.25% as investors awaited key economic updates to assess their impact on policy. Expectations for strong June payrolls weakened after the ADP report showed a surprise job decline, raising hopes for earlier Fed rate cuts. Meanwhile, the House advanced President Trump’s tax and spending bill, which could significantly increase the budget deficit. Markets also looked for progress on trade agreements ahead of the July 9 tariff deadline, though talks with major partners reportedly faced setbacks despite a tariff cut on Vietnam.

Futures Update:  U.S. stock futures saw modest gains as investors reacted to a new trade agreement with Vietnam and looked ahead to the upcoming monthly jobs report. The S&P 500 and Nasdaq Composite closed at record highs in the previous session, while the Dow Jones remained relatively flat but close to its all-time high. Trading activity is expected to be lighter due to the upcoming Independence Day holiday.

Stocks mostly advanced throughout the trading session on Wednesday, with the NASDAQ and the S&P 500 rebounding to the upside after the pullback experienced during Tuesday’s trading. The S&P 500 increased by 29.39 points, or 0.47%, closing at 6,227.41. From a technical analysis standpoint, the index appears poised for further upside movement as it trades in uncharted territory. Additionally, the 14-period RSI is trending higher; unless a divergence occurs, the price is likely to continue moving upward. Key support levels are around 6,000, with resistance expected near 6,380.