Nasdaq Rallies on Trade Deal Optimism and Weak Jobs Data, Fueling Fed Rate Cut Speculation

U.S. equities displayed mixed performance as the Nasdaq Composite led gains, climbing 0.78% amid growing expectations of imminent Federal Reserve rate cuts. The S&P 500 followed with a 0.33% advance, while the Dow Jones Industrial Average bucked the trend with a 0.10% decline.

Market sentiment turned decidedly risk-on following two key developments: the announcement of a preliminary U.S.-Vietnam trade agreement and disappointing private payrolls data. The trade deal eliminates tariffs on American exports to Vietnam while imposing a 20% duty on Vietnamese imports to the U.S., with additional 40% charges on transshipped goods to prevent tariff circumvention.

Labor market concerns intensified as ADP reported an unexpected loss of 33,000 private sector jobs in June, starkly contrasting with forecasts of a 100,000-position gain. This combination of trade progress and employment weakness has markets pricing in higher probability of monetary policy easing, particularly benefiting rate-sensitive growth stocks.