U.S. stock market opened modestly higher on Wednesday despite choppy trading, as weaker-than-expected private payrolls data added to growing concerns over the impact of the Trump administration’s trade policies on the labour market. The Dow Jones Industrial Average rose 54.5 points, or 0.13%, to 42,574.13 at the opening bell. The S&P 500 gained 8.6 points, or 0.14%, to 5,978.94, while the Nasdaq Composite advanced 36.0 points, or 0.19%, to 19,434.94.
Private employers added just 37,000 jobs in May, according to ADP, far below economists’ expectations of 110,000. The soft data has heightened investor anxiety about the strength of the U.S. economy amid rising tariffs and global trade uncertainty. Wednesday’s payroll report comes just as Washington doubled tariffs on imported steel and aluminum to 50%, marking a significant escalation in the Trump administration’s protectionist stance. The move aligns with a deadline Trump set for trade partners to present counteroffers to avoid additional duties slated for early July.
Investors are now closely watching for updates from tariff talks, including a possible conversation between President Trump and Chinese President Xi Jinping, expected later this week. The market reaction reflects deepening concerns that continued trade tensions could further suppress hiring and economic growth. Despite the latest economic warning signs, markets remain near record territory. May was the best month for both the S&P 500 and Nasdaq since November 2023, driven largely by easing fears over trade and expectations of economic normalization heading into 2026.
On Tuesday, stocks closed near all-time highs, with the S&P 500 rising 34.43 points to 5,970.37, the Dow climbing 214.16 points to 42,519.64, and the Nasdaq gaining 156.34 points to 19,398.96. The Russell 2000, which tracks smaller companies, rose 32.82 points to 2,102.98. So far this week, the S&P 500 is up 1%, the Dow up 0.6%, and the Nasdaq up 1.5%. The Russell 2000 leads with a 1.8% gain.
Later Wednesday, investors are expecting additional insights into the economy from the release of S&P Global and ISM’s services sector activity readings for May. However, the main event remains Friday’s nonfarm payrolls report, which will offer a broader picture of how hiring is holding up amid ongoing trade disputes. In the meantime, market sentiment remains cautiously optimistic. Barclays became the latest brokerage to raise its year-end target for the S&P 500, citing improving trade dynamics and expectations for a return to more normalised earnings growth in 2026.