U.S. stocks edged higher on Wednesday, but investors showed caution as the latest private sector employment report revealed the weakest job growth in over two years. According to ADP, only 37,000 jobs were added in May — far below expectations and April's already-revised figure of 60,000. This weaker-than-expected labor data is raising fresh concerns that economic uncertainty, driven by trade policy tensions, might be slowing business confidence and hiring. The Dow Jones Industrial Average rose by 71 points, or 0.2%. The S&P 500 and the Nasdaq Composite also moved up, gaining around 0.3% each. While the uptick reflects some positive investor sentiment, the softness in jobs data kept gains in check.

Potential if economic data keeps weakening.

According to payroll processing company ADP, private sector payrolls rose by just 37,000 in May. This is a steep decline from April's revised 60,000 and well below economists’ forecast of 110,000, based on a Dow Jones survey. The ADP data, released Wednesday, suggests that companies may be pulling back on hiring due to continued trade policy uncertainty and economic slowdown concerns.

With hiring at its lowest point since early 2022, investors are bracing for Friday’s official nonfarm payrolls report from the U.S. government, which is expected to show an increase of about 125,000 jobs for May.

Shortly after the ADP numbers were released, President Donald Trump criticized Federal Reserve Chairman Jerome Powell, writing on social media, “Too Late Powell.” The president has been pushing for interest rate cuts, arguing that the Fed is not acting swiftly enough to support the economy.

Trump’s remarks reflect increasing pressure on the Federal Reserve as data points to a possible slowdown in economic momentum. While the Fed has signaled caution in changing its current policy stance, weaker job growth might raise expectations for rate adjustments in the months ahead.

Yes, tech stocks remain a bright spot in the markets. On Tuesday, the Dow rose more than 200 points, or 0.5%, marking its fourth straight day of gains. Shares of Nvidia climbed nearly 3%, helping the company surpass Microsoft to reclaim its title as the most valuable publicly traded company in the world.

The momentum carried into Wednesday, with Nvidia continuing to rise alongside Broadcom, adding strength to the overall market despite weak job numbers. This shows that investor confidence in the tech sector remains high, even as broader economic indicators show signs of cooling.

How are markets reacting to trade policy uncertainty?

Although trade tensions remain, especially between the U.S. and China, investors seem to believe that the worst may be over. A series of reversals by President Trump regarding tariff enforcement — along with a recent federal court ruling against Trump’s tariffs — has given markets some relief. Even though an appeals court temporarily reinstated the tariffs, the trend suggests tariffs are now viewed more as negotiation tools than long-term threats.

Trump, however, continues to express frustration with trade talks, saying in a recent post that dealing with Chinese President Xi Jinping has been “extremely hard.” That adds a layer of uncertainty, but recent market behavior shows investors are starting to discount the long-term impact of such trade policy moves.

What should investors watch next?

All eyes are now on the U.S. Labor Department’s nonfarm payrolls report, scheduled for release Friday. That report will offer a clearer picture of the jobs market and could influence the Federal Reserve’s upcoming policy decisions.

Markets are also tracking continued developments in trade talks, especially any updates from the White House regarding China. With stocks gaining ground and tech companies leading the way, the next few days will be crucial in determining whether the rally can continue — or if weak economic indicators will catch up with investor optimism.

U.S. stocks rose slightly thanks to strong tech gains, led by Nvidia, despite low private job growth.

Q2: What did Donald Trump say about the weak ADP jobs report?
Trump criticized Fed Chair Powell, saying it's “Too Late” to act and urged for rate cuts.