June 4th, 2025
Market Performance:
• U.S. stocks were on the rise in early Wednesday trading but lost their momentum as fresh job data rolled in.
• The Dow Jones Industrial Average gained 53 points, or 0.1%, just after the opening bell. The S&P 500 advanced 0.2%, while the Nasdaq Composite climbed about 0.3%.
• European markets are trading higher ahead of tomorrow’s European Central Bank interest-rate decision.
• Asian markets were also mostly higher overnight.
Economic Takeaways:
• Bond yields are falling in response to the softer-than-expected jobs data. The 10-year yield opening the day around the 4.4% mark and the 2-year yield is just above 3.9%.
• The ADP private sector jobs report showed only 37,000 positions added in May, the lowest in more than two years and well below expectations for around 115,000.
• Yesterday’s April Job Openings and Labor Turnover Survey (JOLTS) showed stronger-than-expected hiring but rising layoffs.
• Tariff uncertainty continues. Trump posted earlier that dealing with Chinese President Xi Jinping has been “extremely hard.”
• The ISM services index fell to 49.9% on the month, just below the expansion/contraction line and short of the Dow Jones consensus estimate for 52.1%. April’s reading was 51.6%.
• Consumer spending weakened in May, according to Chase spending data shared in a note by JPMorgan analyst Richard Shane. “Total spending growth for May ticked down m/m. Total spending growth fell to ~1.8% as of May 27, below the April figure of ~2.8%. As we look across the data set, it appears that spending growth is modestly eroding,” Shane wrote.
• Bitcoin (/BTC) edged down nearly 1% early Wednesday, with most other cryptocurrencies also trending lower. Shares of crypto-linked firm MicroStrategy (MSTR) declined in tandem. The crypto market has been consolidating after Bitcoin recently notched fresh all-time highs.
• This week marked two months since the market turbulence triggered by former President Trump’s proposed tariff policy—an event now dubbed “tariff liberation day.” Stocks have since rebounded sharply, with Information Technology emerging as the best-performing S&P 500 sector, while Energy has lagged.
• The S&P 500 (SPX) closed Tuesday at a three-month high, topping its mid-May peak by seven points but still falling short of the key 6,000 level, which hasn’t been breached since an intraday move on February 26.
• As of early Wednesday, futures markets priced in just a 1% probability of a Fed rate cut in June and a 24% chance for July, according to the CME FedWatch Tool.
Jobs Data in the Spotlight
Labor market trends are under close watch this week, with fresh data showing mixed signals. The ADP employment report for May revealed that private payrolls rose by just 37,000—sharply below expectations of 115,000 and marking the weakest monthly gain since March 2023. Most of the job growth came from the services sector, while goods-producing industries shed 2,000 jobs.
This weaker-than-expected increase may be an early sign that employers are becoming more cautious about hiring amid ongoing economic and policy uncertainty. Still, the ADP report followed a stronger JOLTS survey released yesterday, which showed job openings rose to 7.4 million in April, up from 7.2 million in March. Although backward-looking, the rise in openings points to continued demand for labor.
There could be some cooling in the labor-market conditions as economic momentum slows.
President Donald Trump called out Federal Reserve Chairman Jerome Powell right after the numbers came out, saying “Too Late Powell” should cut rates.
Even with the “volatile” ADP report and tariff overhangs, Mike Dickson of Horizon Investments told CNBC that “things are probably better than feared.”
“I think the ADP report has had the history of being quite noisy, so I think we’re just going to have to wait and see about Friday as it relates to the labor market,” the firm’s head of research and quantitative strategies said. “Recent inflation data has been pretty tame and healthy in the right direction.”
Dickson still thinks the market is range-bound in the near term, adding that “we’re entering into a little bit of a lull” in terms of market catalysts for the next month.
Good News for Wells Fargo
On Tuesday, the Federal Reserve lifted the $1.97 trillion asset cap that had restricted Wells Fargo for the past seven years. In response, Morgan Stanley reaffirmed its Overweight rating on the stock and raised its price target from $77 to $87, implying a potential 15% upside from Tuesday’s closing price.
“We expect release from the asset cap will spur a multi-year period of growth as Wells seeks to regain its 2.2% points of lost market share in US deposits and 3.3% points of market share in loans since 2017,” analyst Betsy Graseck wrote in a note Wednesday. “Expect additional lending opportunities as they arise and fit Wells’ risk/return profile.”
Bank of America additionally reiterated its buy rating and raised its price target to $90 from $83, implying 19% upside from Friday’s close.
“We see potential for a new pool of investors who had been fatigued by the regulatory overhang to step-in given WFC’s idiosyncratic growth story, room for efficiency gains in the consumer bank and potential for capital relief,” analyst Ebrahim H. Poonawala wrote in a note Tuesday.
Fresh 52-week Highs
Eighteen S&P 500 stocks reached new 52-week highs during Wednesday’s session, with 12 of them setting new all-time records. Here are some of the notable names hitting historic highs:
• Netflix (NFLX): Trading at its highest levels since its IPO in May 2002
• Nasdaq (NDAQ): Reached record highs dating back to April 2003
• Visa (V): Hit new highs since going public in March 2008
• Axon Enterprise (AXON): Set all-time highs, tracing back to when TASER debuted in May 2001
• Cintas (CTAS): Trading at peak levels since its IPO in 1983
• Amphenol (APH): Reached record highs since its market debut in 1991
• Broadcom (AVGO): Hit all-time highs, including its legacy Avago history since its 2009 IPO
• Seagate (STX): Set record highs dating back to its December 2002 IPO
• Corteva (CTVA): Trading at all-time highs since its May 2019 spin-off from DowDuPont
Notables
• CrowdStrike (CRWD) dropped 6.7% in pre-market trading despite surpassing earnings expectations and reporting revenue in line with forecasts. The decline came after the company issued second-quarter revenue guidance that fell short of Wall Street projections.
• Nvidia (NVDA) and Broadcom (AVGO) both gained around 0.8% ahead of the open, continuing tech’s upward momentum from the previous session. Broadcom reached a record high on Tuesday, boosted by optimism ahead of its earnings report and the launch of a new data center switch tailored for AI applications.
• Apple (AAPL) edged lower after Needham downgraded the stock to Hold, citing “threats” to short-term revenue and earnings growth, as well as valuation concerns.
• Wells Fargo (WFC) rose 1.45% after the Federal Reserve lifted the bank’s asset cap—one of the final restrictions remaining from its fake accounts scandal.
• Dollar Tree (DLTR) slipped 2.1% in early trading, even after reporting better-than-expected quarterly results and raising its guidance. Same-store sales increased 5.4%.
• Hewlett Packard Enterprise (HPE) surged 6.7% pre-market after topping second-quarter estimates, driven by strong demand for AI-related services.
• Constellation Energy (CEG) declined 3% ahead of the open following a downgrade by Citigroup from Buy to Neutral.
• Shares of Thor Industries (THO) moved higher 3% after better-than-expected third-quarter results. The recreational vehicle maker posted earnings of $2.53 per share on revenue of $2.89 billion, compared to the
What’s Important Ahead
June 5: ECB rate decision and expected earnings from Broadcom (AVGO), Ciena (CIEN), lululemon (LULU), and Petco (WOOF).
June 6: May nonfarm payrolls.
June 9: Expected earnings from Casey’s General (CASY).
June 10: Expected earnings from GameStop (GME) and Stitch Fix (SFIX).
June 11: May Consumer Price Index (CPI) and expected earnings from Chewy (CHWY).
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