Markets Edge Higher Amid Soft US Jobs Data and Trade Policy Twists

Markets Edge Up Despite Weak US Jobs Data

US stocks ticked higher on Wednesday as investors processed signs of a slowing labour market and new developments in trade policy.

Fresh data from payroll provider ADP revealed that private-sector hiring in the US slowed sharply in May. Just 37,000 jobs were added—well below economists’ expectations of 114,000 and April’s total of 60,000. It marks the smallest monthly gain in private payrolls since March 2023.

Trump Pushes Fed for Rate Cuts

The disappointing job figures reignited calls for interest rate cuts, with former President Donald Trump renewing criticism of Federal Reserve Chair Jerome Powell. Writing on Truth Social, Trump said: “‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

Traders are now watching closely for any signs that the Fed might shift its monetary policy stance in response to slowing employment growth.

US Services Sector Slips Into Contraction

Adding to concerns, the US services sector contracted for the first time since June. The ISM Services Index dipped to 49.9 in May—falling just below the 50 mark that separates expansion from contraction and missing forecasts.

This soft reading raises further questions about the strength of the broader US economy heading into the summer.

UK Avoids Immediate Tariff Hike – For Now

On the trade front, the UK has received temporary relief from new US tariffs on steel and aluminium. President Trump confirmed that Britain will not be subject—for now—to a planned doubling of tariffs to 50%, thanks to a recent trade deal between Washington and London.

However, the higher 50% rate could still be applied from July 9 if the US determines that the UK has not met certain conditions under the agreement. Meanwhile, tariffs on imports from other countries are set to rise immediately.

European Markets Gain on Trade Relief and Policy Hopes

European stocks moved higher, buoyed by the UK’s tariff reprieve and domestic policy announcements. London’s FTSE 100 climbed 0.3% in afternoon trading.

Germany’s DAX rose 0.6% after reports emerged that the German government is preparing a €46 billion package of tax cuts to stimulate growth. France’s CAC 40 was up 0.7%, and the pan-European STOXX 600 gained 0.6%, supported by fresh data indicating eurozone growth in May.

US Markets Steady, Pound Strengthens

In the US, markets saw modest gains. The S&P 500 rose 0.2%, the Dow Jones Industrial Average added 0.1%, and the Nasdaq Composite advanced more than 0.2%, extending the positive trend seen earlier in the week.

Currency markets also reflected renewed optimism. The British pound climbed nearly 0.5% against the US dollar, trading at 1.3580.

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