U.S. Stocks Surge 1.7% as Trump Calls for Rate Cut

On June 4, U.S. stock markets opened with a collective surge, with the Dow Jones, Nasdaq, and S&P 500 indices all turning red. This rally was driven by a combination of factors, including a significant boost in Chinese stocks listed in the U.S. and comments from U.S. President Donald Trump.

The Nasdaq Golden Dragon China Index, which tracks the performance of Chinese companies listed on U.S. exchanges, saw a notable increase, rising over 1.7% by the end of the trading day. Individual stocks within this index also performed strongly, with Zai Lab surging over 12%, Hey Tea climbing over 6%, and Miniso rising over 5%. Electric vehicle manufacturers NIO and Xpeng also saw gains of over 2%.

The rally in U.S. stocks was further fueled by Trump's public call for the Federal Reserve to lower interest rates. Following the release of the ADP employment data for May, which showed a slower-than-expected increase in employment, Trump urged Federal Reserve Chairman Jerome Powell to cut rates. He highlighted the contrast with Europe, where interest rates have been lowered nine times, and expressed his dissatisfaction with the current economic conditions.

The ADP employment data for May indicated that the U.S. economy added 37,000 jobs, significantly lower than the expected 111,000. This slowdown in hiring was accompanied by a slight increase in wage growth, which remained robust for both those staying in their jobs and those switching to new ones. Investors are now awaiting further data on the labor market, including the May services PMI data to be released on Wednesday and the non-farm payroll report on Friday.

In addition to the U.S. market movements, the Bank of Canada decided to keep its benchmark interest rate unchanged at 2.75% for the second consecutive time, in line with market expectations. The bank's governor noted that the U.S.-initiated trade conflicts remain a significant headwind for the Canadian economy. He described the U.S. trade policies as highly unpredictable and emphasized the need for more information before making any policy changes.