Stocks Tick Up as Soft Hiring Data Lifts Hopes for Fed Rate Cut and Trump Renews Pressure on Powell

U.S. equity markets edged higher at the opening bell Wednesday, buoyed by investor optimism that a dramatic slowdown in private-sector hiring could prompt the Federal Reserve to lower interest rates in the coming months.

The Dow Jones Industrial Average opened up 51.88 points, or 0.12%, to 42,571.5. The Nasdaq Composite rose 52.44 points, or 0.27%, to 19,451.4, while the S&P 500 gained 12.02 points, or 0.20%, to start the day at 5,982.39. The Russell 2000 index also climbed, albeit modestly, adding 0.20 points (0.10%) to reach 209.23.

WATCH: Missed Bitcoin? Uranium’s 2030 Boom Could Be Your Second Chance

Jobs Data Misses the Mark

Markets reacted swiftly to the ADP National Employment Report, which showed U.S. private employers added only 37,000 jobs in May—well below the consensus forecast of 140,000 and April’s revised 60,000. According to ADP, this marks the weakest monthly print since March 2023 and signals growing fragility in the labor market amid ongoing macroeconomic uncertainty and tariff pressures.

President Donald Trump posted on Truth Social in response, continuing his campaign to pressure Federal Reserve Chair Jerome Powell. “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

Economists viewed the report as a potential catalyst for monetary easing. CME’s FedWatch tool now places nearly 70% odds on a rate cut in September.

Sector and Regional Breakdowns Show Uneven Terrain

Job gains were largely confined to the service sector, with leisure and hospitality leading at +38,000 and financial activities adding 20,000 positions. Professional and business services contracted by 17,000 jobs, while education and health services shed 13,000. The goods-producing sector posted a net loss of 2,000 jobs, reflecting weak output in mining and manufacturing.

By region, the West saw the most hiring, with 37,000 new positions, while the Northeast suffered significant losses, particularly in New England. Small businesses and large firms cut jobs, while medium-sized businesses added 49,000—a lone bright spot in an otherwise lackluster report.

Trump Renews Trade Pressure on China

In a separate post, Trump commented on Chinese President Xi Jinping: “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”

Beijing responded with a statement from Foreign Ministry spokesman Lin Jian, who reiterated that “China’s principle and position of developing China-US relations is consistent,” signaling no shift in the current standoff.

The Trump administration’s recent announcement to double tariffs on steel imports to 50% adds to the market’s caution. Tariff-related cost pressures are already seeping into sectors like manufacturing and construction, further complicating the Fed’s policy response.

Outlook

With the Fed’s next meeting in mid-June, all eyes now turn to Friday’s official nonfarm payrolls report. A confirmation of the ADP trend could seal the case for a rate cut as early as July. Until then, investors remain in a holding pattern—watchful of the data, the Fed, and the ever-volatile trade rhetoric.