[New York Stock Market Briefing] Mixed Close Amid US Economic Slowdown Concerns... Tesla Drops Over 3%

The three major indexes of the New York Stock Exchange closed mixed, hovering around flat territory. This is attributed to heightened concerns over an economic slowdown as expectations for a US-China agreement weakened and private sector employment fell to its lowest in over two years last month.

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,427.74, down 91.9 points (0.22%) from the previous session. The S&P 500 Index rose 0.44 points (0.01%) to close at 5,970.81, while the tech-heavy NASDAQ Composite Index finished up 61.53 points (0.32%) at 19,460.49.

Investor sentiment was dampened by President Donald Trump's comment on his Truth Social that negotiations with Chinese President Xi Jinping would be tough, further fueling concerns about the US-China talks.

Additionally, the private payroll and services sector indicators released today came in below market expectations, serving as downward factors.

According to the Automatic Data Processing (ADP) employment report, private sector jobs increased by 37,000 last month compared to the month before. This is the lowest level since March 2023 and far below the market expectation of 115,000.

Following this news, concerns over US nonfarm payrolls in May also grew. The ADP private payroll report is released ahead of the Department of Labor's nonfarm payroll data and serves as a benchmark.

Mike Dixon, a strategist at Horizon Investments, said, "ADP is volatile, and reality may be better than feared," but also noted, "In the short term, the market seems to be entering a somewhat sideways phase."

The US services sector also entered a contraction phase for the first time in about a year, signaling a slowdown. The Institute for Supply Management (ISM) announced that the Purchasing Managers' Index (PMI) for the services sector came in at 49.9 in May. This was below the expected 52, and also worse than the previous month (51.6).

Anthony Nelson Miller, chairman of ISM, said, "This figure does not indicate a severe recession but shows that uncertainty is spreading widely across the service sector."

By sector, energy and utilities fell close to 2%, while communication services rose more than 1%.

Among large tech companies, results were mixed: Meta Platforms climbed more than 3%, while Tesla dropped over 3%.

Netflix jumped 1.78% to hit another all-time high. Despite strong first quarter results, US cybersecurity firm CrowdStrike plunged over 5% after its annual guidance for this year fell short of market expectations.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability that the Fed will hold the benchmark interest rate steady in July stands at 69.9%, down from 75.6% near the close the previous day. The probability that the benchmark interest rate will be cut by 0.75 percentage points by December jumped to 33.1% from 24.4% the previous day.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) dropped 0.08 points (0.45%) to 17.61.

Go Jeong-sam, Hankyung.com reporter jsk@hankyung.com