The S&P 500 ETF (SPY) and the Nasdaq 100 ETF (QQQ) ended Wednesday with solid gains after President Trump announced a trade deal between the U.S. and Vietnam.
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As part of the agreement, Vietnam has agreed to scrap all taxes on U.S. imports. In return, the U.S. will charge a 20% baseline tariff on Vietnamese imports and a 40% tariff for products transshipped from Vietnam. The transshipment tariff was enacted in order to counter goods shipped from China or other places to Vietnam and then re-exported to the U.S.
The trade deal offset a concerning jobs report. In June, private payrolls declined by 33,000 jobs, the first negative reading since March 2023. Economists were expecting private payrolls to grow by 98,000 jobs.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said ADP (ADP) Chief Economist Nela Richardson. “Still, the slowdown in hiring has yet to disrupt pay growth.”
Meanwhile, Bill Pulte, who is the Director of the Federal Housing Finance Agency (FHFA) and the Chairman of Fannie Mae (FNMA) and Freddie Mac (FMCC), has called for an investigation of Fed Chair Jerome Powell.
“I am asking Congress to investigate Chairman Jerome Powell, his political bias, and his deceptive Senate testimony, which is enough to be removed ‘for cause,'” said Pulte. Pulte has also accused Powell of making inaccurate statements to Congress regarding the central bank’s $2.5 billion renovation of its headquarters in Washington, D.C. Powell had said that the renovations were necessary in order to address the building’s safety and waterproofing measures.
The S&P 500 has mounted an incredible comeback since bottoming on April 8, rising by about 25%. However, Barclays’ (BCS) proprietary Equity Euphoria Indicator has now issued a warning signal. The index is now in double-digit territory, seen during “overly exuberant” market periods like the Dotcom era and the meme stock frenzy of 2021. The indicator’s historical average is around 7%.
The S&P 500 finished with a 0.47% gain, while the Nasdaq 100 closed higher by 0.73%.
