[New York Stock Market Briefing] Rise on US-Vietnam Trade Agreement... S&P500 Hits All-Time High

Nike, Tesla up more than 4%

The S&P 500 index, representing the New York stock market, hit a record high following reports that the United States had reached a trade agreement with Vietnam.

On the 2nd (local time) at the New York Stock Exchange, the S&P 500 closed at 6,227.42, up 29.41 points (0.47%) from the previous session. This reset the high recorded on the 30th of last month. The tech-heavy NASDAQ Composite Index ended at 20,393.13, up 190.24 points (0.94%), closing in on its previous record. The Dow Jones Industrial Average finished at 44,484.42, down 10.52 points (0.02%).

After Donald Trump, President of the United States, announced that a trade agreement had been reached with Vietnam, optimism that negotiations with other countries would also progress boosted investor sentiment.

The Trump administration had imposed a 46% reciprocal tariff on Vietnam last April, but Vietnam has now agreed to significantly lower the tariff to 20% in exchange for opening its market.

Nike, which relies heavily on manufacturing in Vietnam, rose by 4.06% following the announcement of the agreement. Tesla surged by 4.97% after confirming that its Q2 vehicle deliveries were not as disappointing as feared.

However, news that private sector employment had contracted more than expected tempered investor optimism stemming from the trade deal.

Automatic Data Processing (ADP), a US employment data firm, announced that private company employment in the US decreased by 33,000 in the previous month compared to the month before. Monthly private company employment declined for the first time in two years and three months since March 2023 (-53,000).

Concerns over economic slowdown have grown due to the Trump administration’s tariff policy, and the market is closely monitoring changes in the job market for clues about the economic outlook.

Jim Awad, Senior Managing Director of ClearsTed Advisor, said, "If employment weakness leads the Fed to cut rates early, it could be positive for the market," adding, "But if the deterioration is sharp, it will negatively affect the economy and corporate profits."

Investors are watching for the US Department of Labor's June nonfarm payroll data to be released on the 3rd. Expert forecasts compiled by Dow Jones expect an increase of 110,000 jobs in June.

If the Department of Labor's employment report also indicates unexpected labor market weakness following the ADP employment data, expectations for an early Fed rate cut are likely to grow.

Jung Sam Ko, Hankyung.com reporter jsk@hankyung.com