Stocks Hold Steady Despite Weak Data, Buoyed by Big Tech

(Bloomberg) — US equities eked out a third straight session of gains on Wednesday as a rally in big technology stocks offset weak economic data on jobs and services. 

The S&P 500 Index closed up 0.01%, with six of the 11 sectors in green. The Nasdaq 100 gained 0.3% and the Dow Jones Industrial Average fell 0.2%.

In individual stocks, Broadcom Inc. added to recent gains, and the stock was among the top contributors to the equity benchmark’s gains on Wednesday. Dollar Tree Inc. shares fell 8.4% as it warned investors that its second quarter profit could be down as much as 50% from a year earlier due to tariff-related costs. Industrial companies Chart Industries Inc. and Flowserve Corp. agreed to merge in a deal valuing the combined company at about $19 billion.

Across Wall Street, some strategists are turning more optimistic. Barclays’ Venu Krishna was the latest to raise his 2025 price target on the S&P 500, to 6,050 from 5,900, saying the peak tariff uncertainty has likely passed, which should allow modest valuation expansion. 

After the equity benchmark’s strong run in May, the three straight days of gains in June through Wednesday put the index close to the all-time high touched on Feb. 19.  

“The slow, choppy grind higher may reflect the diminishing direct and indirect impacts of tariffs on earnings, coupled with the recent positive momentum in US earnings estimate revisions over the past few weeks,” said Mark Hackett, chief market strategist at Nationwide.

Earlier, data from ADP Research showed hiring decelerated to the slowest pace in two years as sectors including business services and education and health shed jobs. That was followed by the Institute for Supply Management’s index of services, which showed activity at US service providers slipped into contraction territory last month for the first time in nearly a year.

Additionally, the Federal Reserve in a survey of regional business contacts said economic activity declined slightly in the US in recent weeks, indicating tariffs and elevated uncertainty are rippling across the economy.

The hiring figures will add to the focus on a key monthly government labor report due on Friday.

“The ADP report suggests the fallout from months of policy turmoil may be seeping into corporate hiring decisions,” said Adam Crisafulli of the Vital Knowledge newsletter.  

The report prompted President Donald Trump to comment in a social-media post that Fed Chair Jerome Powell should consider lowering interest rates.

News flow on the trade front continued to be mixed, as Trump said in a social media post that Chinese leader Xi Jinping was tough to make a deal with. Meanwhile, the EU trade commissioner told reporters that trade talks with US are headed in the “right direction.”

Investors’ focus now turn to any other details on the tariff negotiations and Friday’s US employment report. Economists polled by Bloomberg expect the US economy likely created roughly 130,000 jobs in May, down from 177,000 a month prior. The jobless rate is expected to hold steady at 4.2%. 

In geopolitics, Ukrainian President Volodymyr Zelenskiy said he is ready to meet with Russian President Vladimir Putin even without a ceasefire monitoring mechanism.

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