US Stocks Soar on Vietnam Trade Deal and Tech Rally, Despite Job Market Concerns

The U.S. stock market experienced a mixed but ultimately positive day, with the S&P 500 and Nasdaq Composite closing at record highs. This surge was primarily fueled by President Trump’s unexpected announcement of a new trade deal with Vietnam and a significant rally in major technology stocks, including Tesla. However, optimism was tempered by a weaker-than-expected ADP private payrolls report for June, raising concerns about the labor market.

Trade Deal Sparks Market Optimism

President Donald Trump’s announcement of a new trade deal with Vietnam via Truth Social provided a significant boost to investor sentiment. While details of the agreement remain scarce, the news was enough to shift market focus towards potential international cooperation and away from ongoing global economic uncertainties. This development is seen as a strategic move to balance Asian trade relations, especially amidst lingering tensions with China.

Tech Stocks Lead the Charge

Technology megacaps were a major driver of the market’s gains. Tesla, for instance, saw its stock surge by 5% after reporting second-quarter deliveries that, while a 14% decline year-over-year, were perceived as better than analysts‘ bleak forecasts. Other tech giants like Nvidia and Apple also contributed to the Nasdaq’s strong performance, pushing it to a new record high.

Weak Jobs Data Raises Fed Rate Cut Speculation

Despite the positive momentum from the trade deal and tech rally, the market’s enthusiasm was somewhat restrained by concerning labor market data. The ADP private payrolls report revealed a loss of 33,000 jobs in June, marking the first monthly decline since March 2023 and significantly missing economists‘ expectations of a 100,000-job gain. This unexpected contraction in private sector employment has intensified speculation about a potential Federal Reserve interest rate cut at its upcoming July meeting. Analysts suggest that persistent weakness in the labor market could prompt the Fed to act, especially as inflation pressures show signs of cooling.

Key Index Performance

S&P 500: +0.47% (closed at 6,227.42)
Nasdaq Composite: +0.94% (closed at 20,393.13)
Dow Jones Industrial Average: -0.02% (closed at 44,484.42)

Sector Highlights and Major Movers

Tesla: Surged 5% following Q2 delivery report.
Centene: Plummeted 40% after withdrawing its 2025 earnings forecast due to lower enrollment rates.
Robinhood: Climbed over 7% on speculation of its potential inclusion in the S&P 500.
Health-care sector: Generally under pressure, with some major providers experiencing significant drops.
Materials and Industrials: Saw gains as investors rotated into value sectors.

Looking Ahead

Investors are now keenly awaiting Thursday’s official non-farm payroll report, which is forecasted to show a gain of 110,000 jobs. The outcome of this report will be crucial in shaping expectations for the Federal Reserve’s monetary policy decisions. Additionally, the market continues to monitor the progress of Trump’s tax-and-spending bill, which recently passed the Senate and is now heading to the House, as well as ongoing geopolitical developments and tariff deadlines.