The S&P 500 closed at a new all-time high on Wednesday, lifted by a rebound in tech stocks and renewed optimism surrounding international trade agreements. These positive developments helped overshadow weaker-than-expected jobs data showing the first decline in private payrolls in over two years.

At the close (NASDAQ: MSFT), the Dow Jones Industrial Average edged down 10 points, or 0.02%. The S&P 500 rose 0.5% to a record 6,226.63, while the tech-heavy NASDAQ Composite gained 0.9%.

Tech Recovery and Trade Momentum Drive Gains

Investor sentiment improved after President Donald Trump announced a new trade deal with Vietnam—the third agreement reached ahead of the July 9 deadline, when a pause on reciprocal tariffs is set to expire. The announcement follows recent progress on deals with China and Canada, and speculation that India may also reach an agreement in the coming days.

Trump stated he has no plans to extend the deadline and will begin formally notifying countries of the tariff rates they will face. According to a Financial Times report, the U.S. is now prioritizing smaller, phased trade agreements in an effort to secure quick victories before the deadline.

Private Sector Jobs Fall for First Time Since 2022

U.S. private payrolls declined by 33,000 in June, falling well short of expectations for a 99,000 increase. It marks the first monthly decline in private employment in over two years. May’s figures were also revised down to 29,000 from an initially reported 37,000—the lowest gain since March 2023.

ADP noted that job losses were concentrated in professional and business services, education, and healthcare. In contrast, modest gains were seen in hospitality, leisure, and manufacturing.

Despite a surprising increase in job openings reported Tuesday, overall hiring slowed, hinting at a potential cooling in the labor market. Investors are now focused on Thursday’s nonfarm payrolls report for further insight into employment trends.

At a central bank conference in Sintra, Portugal, Federal Reserve Chair Jerome Powell reiterated his data-dependent approach to monetary policy. Analysts at Morgan Stanley suggested that further labor market weakness could prompt the Fed to consider interest rate cuts as early as July.

Senate Pushes Forward with Trump’s Economic Plan

In a narrow vote, the Senate passed President Trump’s sweeping fiscal package—referred to as the “One Big Beautiful Bill.” The legislation now moves to the House of Representatives, which aims to approve it by July 4.

The bill, a centerpiece of Trump’s economic agenda, includes extensions of the 2017 tax cuts, new tax relief provisions, and increased spending on defense and border security. However, some Republicans have raised concerns about its long-term impact on the national debt, with nonpartisan estimates projecting it could add over $3 trillion to the federal deficit.

Tesla Rebounds Despite Renewed Trump-Musk Tensions

Tesla (NASDAQ: MSFT) shares bounced back on Wednesday after sharp losses the previous day, following renewed criticism from Trump. The former president accused CEO Elon Musk of taking excessive advantage of federal subsidies and called for a review of Tesla’s government support.

Despite the tension, Tesla reported second-quarter deliveries of 384,122 vehicles—down from 443,956 a year earlier but better than some analysts had feared.

Meanwhile, Microsoft (NASDAQ: MSFT) announced it would lay off up to 9,100 employees, or about 4% of its global workforce, in its largest workforce reduction since 2023. The company said the move is part of an ongoing restructuring strategy to adapt to changing business needs.

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