The S&P 500 experienced an uptick on Wednesday following the announcement of a U.S.-Vietnam trade agreement by President Donald Trump. However, a new report indicating a surprising decline in private payrolls for June has heightened concerns regarding the health of the U.S. economy. The S&P 500 experienced an uptick following Trump’s announcement on Truth Social regarding the agreement between the United States and Vietnam. The agreement encompasses a 20% tariff imposed on imports originating from Vietnam. Shares of Nike, which manufactures approximately half of its footwear in Vietnam as well as China, experienced an increase of 4%.

The broad market index experienced an increase of 0.47%, concluding the session at 6,227.42. The S&P 500 achieved a new all-time intraday high and concluded the session at a record level. The Nasdaq Composite advanced by 0.94%, achieving a record closing value of 20,393.13. The Dow Jones Industrial Average declined by 10.52 points, representing a decrease of 0.02%, concluding at 44,484.42. Earlier Wednesday, equities faced some downward pressure following the recent report from ADP, which indicated that the private sector experienced a loss of 33,000 jobs in the previous month. This signifies the inaugural monthly decrease in ADP’s payrolls report since March 2023. According to a survey conducted by Dow Jones, economists anticipated an increase in payrolls of 100,000.

“We have observed a persistent weakening in the labor market over several months, and I have often questioned whether a negative payrolls report would prompt the Federal Reserve to focus more on labor market conditions rather than solely on inflation metrics,” stated Ross Mayfield, investment strategist at Baird, in an interview with CNBC. “This is, in that regard, what will ideally attract some notice.”Indeed, the ADP report has a rather unimpressive history in forecasting the government’s monthly nonfarm payrolls report, which is set to be released on Thursday. Analysts anticipate an addition of 110,000 jobs for the month of June.

However, should the forthcoming jobs data align with the ADP report by falling short of expectations, a reduction in interest rates by the Federal Reserve could be considered during the policymakers’ meeting later this month, as noted by CFRA Research’s Sam Stovall. Anticipations surrounding a potential reduction in interest rates by the Federal Reserve at its upcoming July meeting have been on the rise. The CME Group’s FedWatch tool indicates an approximate 23% probability of a cut, an increase from nearly 21% the previous day.

“If we end up having a fairly weak employment report, then that could allow the Fed to be cutting rates,” stated Sam Stovall, chief investment strategist at CFRA Research. He also noted that Fed Chair Jerome Powell recently affirmed that the central bank would have implemented rate cuts by this time if not for Trump’s tariff proposals disclosed earlier this year.”If that were the case then, it could be the case now, particularly in light of potentially weaker-than-expected employment data,” Stovall added.

Market participants were closely monitoring the tax-and-spending legislation proposed by Trump, which achieved a narrow passage in the Senate on Tuesday. The measure is back in the House, where some GOP lawmakers continue to resist.