U.S. stock futures showed modest gains Thursday ahead of the highly anticipated June nonfarm payrolls data. Meanwhile, investors were analyzing the initial trade agreement announced between the U.S. and Vietnam, as the White House pushes to secure bilateral deals ahead of the looming expiration of delayed reciprocal tariffs. In Washington, Republican leaders in the House are working to finalize President Donald Trump’s signature tax and spending legislation before the self-imposed July 4 deadline.
Futures move upward
By early Thursday morning, Dow futures were up by 39 points (0.1%), S&P 500 futures climbed 6 points (0.1%), and Nasdaq 100 futures gained 33 points (0.1%). This marks the final trading day before the U.S. market closes for the Independence Day holiday.
Wall Street’s main indexes mostly closed higher on Wednesday. Both the S&P 500 and Nasdaq Composite set new record highs, while the Dow remained flat but near its all-time peak. Investor confidence was buoyed by Trump’s announcement of a trade deal with Vietnam, a key supplier of goods like footwear and sports apparel. Tech giants such as Nvidia and Apple also saw their shares rise.
Markets initially reacted negatively to a surprise decline in private payrolls data released earlier in the week, but many interpreted this as increasing the chances the Federal Reserve will aggressively cut interest rates soon.
Focus on the June jobs report
The spotlight now shifts to Thursday’s official U.S. jobs report from the Bureau of Labor Statistics. Economists forecast an addition of 111,000 jobs in June, down from May’s 139,000, while the unemployment rate is expected to tick up slightly to 4.3%.
Wednesday’s ADP employment report suggested companies are hiring cautiously amid tariff-related uncertainty, with workers less willing to change jobs. However, the ADP numbers don’t always align with the official government data.
Fed officials, tasked with promoting maximum employment, will be closely watching these labor market trends, especially given concerns about tariffs’ impact on the broader economy. Fed Chair Jerome Powell has faced mounting pressure from President Trump to cut rates quickly but has signaled a measured approach, noting the Fed could reduce borrowing costs at upcoming policy meetings later this year.
Trump unveils Vietnam trade agreement
Stocks erased early losses Wednesday following Trump’s announcement of a new trade deal with Vietnam that sets a 20% tariff on imports from the Southeast Asian nation. Analysts noted this rate is lower than the harsher reciprocal tariffs Trump had proposed in April.
Shares of companies like Nike, which source products from Vietnam, rose on the news. The agreement also imposes a 40% tariff on “transshipping,” a tactic used to reroute Chinese goods through Vietnam to avoid U.S. tariffs. The White House sees this deal as a step forward in reining in such practices.
Although still preliminary and less comprehensive than usual trade agreements, the pact suggests progress by the Trump administration in securing new trade deals ahead of the planned reinstatement of reciprocal tariffs later this month. Trump has also struck similar trade pauses with China and the U.K. and hinted at potential talks with India.
U.S. eases chip export controls to China
In related trade news, the U.S. Commerce Department has lifted restrictions on exports of chip design software to China, according to statements from companies like Synopsys and Cadence Design Systems. Both firms’ shares surged following the announcement.
Synopsys confirmed the U.S. government had rescinded export limitations imposed in late May and that it was working to restore product access in China.
House Republicans race to pass Trump’s budget plan
Back in Washington, Republican leaders in the House of Representatives are scrambling to secure enough votes for a sweeping tax and spending package championed by Trump. The legislation aims to extend and expand 2017 tax cuts while increasing defense and border security funding.
However, some conservatives worry the bill would worsen the national debt and have criticized proposed Medicaid cuts. With narrow Republican majorities and unified Democratic opposition, leaders face a tight margin. Trump’s July 4 deadline adds urgency to the negotiations.
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