U.S. stock market opens higher, with the Dow Jones rising slightly amid weak private payrolls data that showed only 37,000 new jobs added in May, far short of expectations. The report raises concerns over trade policies and their impact on the labor market. Investors are awaiting more economic insights while navigating ongoing trade tensions, yet sentiment remains cautiously optimistic.

On Wednesday, the U.S. stock market saw a modest uptick, despite some volatility, following the release of disappointing private payrolls data. The Dow Jones Industrial Average climbed 54.5 points, or 0.13%, reaching 42,574.13 by the opening bell. The S&P 500 registered a gain of 8.6 points, or 0.14%, settling at 5,978.94, and the Nasdaq Composite increased by 36 points, or 0.19%, to 19,434.94.

According to the ADP report, private employers only added 37,000 jobs in May, significantly below the anticipated 110,000. This underwhelming data has intensified investor concerns regarding the robustness of the U.S. economy, particularly amid escalating tariffs and ongoing global trade uncertainties. The release of this payroll information coincides with Washington’s recent decision to double tariffs on imports of steel and aluminum to 50%, marking a notable escalation in the Trump administration’s protective trade policies. This bold move aligns with President Trump’s deadline calling for trade partners to provide counteroffers to avoid further duties anticipated in early July.

Market participants are keeping a close eye on tariff negotiations, including a potential discussion between President Trump and Chinese President Xi Jinping, anticipated later this week. The stock market’s response reveals increasing worries that persistent trade disputes could dampen hiring and hinder economic growth. Yet, despite these recent economic caution signals, the markets remain in notable territory. May was a strong month for the S&P 500 and Nasdaq, both experiencing their best performance since November 2023, largely fueled by easing trade fears and forecasts of economic normalization moving into 2026.

On the previous day, stocks closed at or near record highs: the S&P 500 added 34.43 points to reach 5,970.37, the Dow advanced by 214.16 points to 42,519.64, and the Nasdaq climbed 156.34 points to 19,398.96. The Russell 2000 index, which represents smaller companies, saw an increase of 32.82 points to 2,102.98. Thus far this week, the S&P 500 is up 1%, the Dow by 0.6%, and the Nasdaq by 1.5%, while the Russell 2000 leads with a 1.8% gain.

Later in the day, investors are looking forward to further economic updates from the S&P Global and ISM’s service sector activity readings for May. Nevertheless, all eyes are on Friday’s nonfarm payrolls report, which should provide a more comprehensive view of employment trends amid the ongoing trade controversies. For now, market sentiment remains cautiously optimistic. Barclays has recently raised its year-end target for the S&P 500, citing favorable developments in trade relations along with expectations for a return to normalized earnings growth by 2026.

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