On Wednesday, American equities experienced a slight surge as market participants absorbed the astonishing deceleration in the growth of private-sector employment, while former President Trump expressed his criticism towards Jerome Powell following the release of the data. The ADP employment report showed a disappointing increase of merely 37,000 in private workforces for the month of May, which is a far cry from the 114,000 figures anticipated by economists. April’s report showed an addition of 60,000 jobs. This denotes the least increment in private workforces since as far back as March 2023.
Former President Trump exerted pressure on the Chair of Federal Reserve to effect a reduction in interest rates through a post on his social media platform, Truth Social, where he insinuated that Powell should effect a belated reduction in rates. In his own words, Trump wrote, “‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Concurrently, a decline in the US services sector was witnessed – a trend unseen since the preceding June.
Based on data from the services index of the Institute for Supply Management, the most recent figure dropped to 49.9 for May. Remaining just under the 50 figure which distinguishes growth from contraction, this paints a less than optimistic outlook. It’s a worse outcome than originally projected. The FTSE 100 and markets across Europe also saw a rise this past Wednesday. This followed the announcement that the UK would be exempt, at least provisionally, from an executive order by Donald Trump, doubling the tariffs on steel and aluminum to 50%.
In an official announcement, the former US president let it be known that he had opted to ‘provide different treatment’ for the UK following the conclusion of a trade agreement between Washington and London the previous month. However, the US continues to impose double tariffs, increasing from 25% to 50%, on imports of steel and aluminum from other countries. For imports from the UK, tariffs would remain at the current rate of 25%, although there is the potential that it could soar to the full 50% starting from July 9, if the administration resolves that the UK has failed to uphold relevant portions of their agreement.
As the day progressed, London’s financial barometer index was seen ascending by 0.3%. At the same time, Germany’s DAX index was noted advancing by 0.6% based on the back of unverified news that the German government is considering executing a tax relief plan estimated at €46bn. The French index, CAC, likewise recorded a 0.7% increase.
The pan-European STOXX 600 also witnessed growth of 0.6%, corresponding with data of the eurozone economy growth during May as suggested by the most recent PMI surveys. Post bell trading in New York saw the S&P 500 index climb up by 0.2%, whereas the Dow Jones Industrial Average Index tacked on an increment of over 0.1%. The tech-centered Nasdaq Composite index also build on its solid start to the week, accumulating over 0.2%.
The pound sterling saw an uplift, almost 0.5% higher against the US dollar, measured at 1.3580 as of 15:51:34 BST during market trading hours. Thus, even amidst unsettling economic data and international trade uncertainties, global indices showed resilience, slightly inching higher, fueled by hopes of a rebound in economic growth and relief from double tariffs for the UK, at least temporarily.
The post US Equities Surge Despite Disappointing Employment Growth appeared first on Real News Now.
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