U.S. Stock Market Maintains Uptrend Despite Weakening Private Sector Employment

NVIDIA Takes a Breather After Becoming No.1 by Market Cap, Tesla Declines

Korea ETF Reaches Highest Level Since October 2024

On the 4th (local time), the U.S. stock market is fluctuating as gains narrow following the news that private sector employment has fallen to its lowest level in two years.

As of 10:10 a.m. Eastern Standard Time, the S&P 500 and NASDAQ Composite Index each rose by 0.2%. The Dow Jones Industrial Average was up 0.1%.

On this day, as May employment figures slowed to the lowest level in two years, bond yields fell. The 10-year Treasury yield dropped by 5 basis points (1bp=0.01%) to 4.41%. The Bloomberg Dollar Spot Index decreased by 0.2%. Bitcoin dropped 0.8% to trade at $105,008.

However, Wall Street continues its upward trend driven by tech stocks, setting aside concerns over tariffs and the economy. NVIDIA shares rose 3% the previous day, overtaking Microsoft to become the world's largest company by market capitalization. On this day, the stock opened with a slight decline.

As CEO Elon Musk sharply criticized the Trump administration's tax cut plan, reigniting political interest, Tesla fell 4.5% on news that sales in its largest market, China, plunged 15%.

Meanwhile, Korean ETFs saw a boost as political leadership uncertainties eased; the iShares MSCI South Korea ETF opened 2.6% higher at 63.59, the highest level since October 2024. Korean ETFs are expected to mark four consecutive weeks of gains, the first time since January.

The ADP National Employment Report for the day announced that private sector hiring increased by just 37,000 in May, the lowest in over two years. This is lower than the downwardly revised 60,000 in April and far below economists' expectations of 110,000, leaving Wall Street in shock.

This is interpreted as indicating that heightened uncertainty over President Trump's inconsistent economic policies has affected corporate hiring. Immediately after the ADP report, President Trump posted on his social media urging Federal Reserve Board Chair Jerome Powell to cut interest rates.

The report casts a shadow over the U.S. Department of Labor’s nonfarm payroll report to be released Friday. According to a Dow Jones survey, economists currently expect 125,000 new jobs to be added in May.

Swap traders expect two interest rate cuts before the end of this year, with the first likely happening in October.

Chris Larkin, managing director at E*TRADE of Morgan Stanley, said, "The ADP employment report does not always accurately predict the government's monthly employment data, but today's unexpected drop is more concerning than usual."

Meanwhile, President Trump imposed a 50% tariff on steel starting at midnight on the 4th and stated, "It is very difficult to reach an agreement with President Xi Jinping of China," suggesting tough U.S.-China negotiations ahead.

Contributed by Kim Jung-ah, kja@hankyung.com