American markets open slightly positive after the publication of weaker-than-expected labor market data. The ADP and Challenger Job Cuts reports confirm a significant cooling in employment. Futures on the S&P 500 and Nasdaq remain slightly positive, but investors are clearly waiting for a bigger move until tomorrow's payroll data.
Macroeconomic Data:
ADP data showed a slower increase in jobs than the consensus expected: 54,000 compared to the expected 71,000.
Challenger Job Cuts indicated a significant rise in planned layoffs, increasing from 62,000 to 85,900.
Unit labor costs in the second quarter of 2025 decreased to 1% (expected 1.1%, previously 6.9%).
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Overall, these data allow us to observe not only a tightening labor market but, more importantly, a deterioration in the situation of workers at a faster pace than the market anticipated. Pressure on the FED increases with each reading. In light of such poor data, one must ask whether FED rate cuts are overdue. However, the market awaits the verdict until the publication of tomorrow's NFP data.
Donald Trump's trade policy continues to fail. The USA has increased its trade deficit for another consecutive month, mainly with China, particularly in electronics and consumer goods. Tariff policies primarily exert pressure on demand for American goods.
The newly published ISM report for the services sector turned out to be better than expected, indicating sustained resilience in the economy despite weakness in the labor market. The index rose above forecasts, suggesting strong demand in services – a key segment of the American economy.
US500 (D1)
Source: Xstation
The price on the chart continues to hold at the lower boundary of the growth channel, which is likely to become a long-term resistance. The nearest trend line is at the level of 6,330 dollars, but the first resistance is very close, at the FIBO 23.6 line. Buyers show their strength by repeatedly defending important levels and quickly recovering losses. In the case of further increases, the nearest strong resistance is the level of the last ATH around 6,500.
Company News:
Broadcom (AVGO.US) — The company publishes its results today after the session. Some investors fear a "sell the facts" scenario in case of even slight disappointment with the results. Expectations for the electronics manufacturer are enormous, with the market seeing an EPS growth of over 30%.
Tesla (TSLA.US) — The company has made its robotaxi application widely available in Austin, the capital of Texas. The price rises by just over 1% at the opening.
Salesforce (CRM.US) — The e-commerce software giant disappointed with its sales forecasts, increasing investor concerns about the pace of AI implementation and monetization. In light of this information, the fact that the company is reducing its workforce by 4,000 people may also be concerning. The stock price starts the session with significant declines, down by as much as 7%.
Apple (AAPL.US) — The technology giant announces the release of its own AI model to compete with ChatGPT and Perplexity. The stock price slightly decreases.
Hewlett Packard (HPE.US) — The producer and distributor of servers and PCs published its results. The company managed to exceed expectations for both EPS and revenues. Additionally, positive sentiment was provided by comments from the CEO, assuring a new era for the company and its participation in the AI market. The stock price notes an increase.
