The U.S. stock market experienced mixed movements and thin trading volume on Wednesday as many participants departed early for the long holiday weekend. Despite opening mixed after worse-than-expected jobs data, the S&P 500 and Nasdaq Composite ultimately closed at new record highs. The S&P 500 gained 0.47% to 6,227.42, and the Nasdaq Composite rose 0.94% to 20,393.13. Conversely, the Dow Jones Industrial Average slipped slightly by 0.02% to 44,484.42, though it remained within close proximity of its December 4 record. This backdrop reflected choppy trading sessions but a strong investor appetite for risk amidst prevailing uncertainties surrounding inflation, the national deficit, and economic policy.

A significant factor influencing market sentiment was the release of the ADP Research report, which showed the U.S. private sector unexpectedly lost 33,000 jobs in June. This figure was a substantial miss compared to economists' expectations of 100,000 job additions and marked the first contraction in private payrolls since March 2023. Nela Richardson, chief economist at ADP, noted that while layoffs remained rare, a hesitancy to hire and a reluctance to replace departing workers contributed to the job losses. The largest declines were observed in professional and business services and health and education sectors, which collectively shed 108,000 jobs, partially offset by growth in the leisure and hospitality industry. This surprising report heightened anticipation for the more comprehensive non-farm payrolls report due on Thursday, a day earlier than usual due to the July 4th holiday. Investors are keenly watching for any signs of labor market weakness, as it could strengthen the case for the Federal Reserve to implement an interest rate cut sooner than expected. Futures traders, according to CME Group’s FedWatch, were pricing in a 23% chance of a quarter-percentage point rate cut at the Fed's upcoming meeting.

In legislative and trade news, Wall Street closely monitored developments from Capitol Hill. President Donald Trump's “Big Beautiful Bill,” a massive tax cut and spending bill, narrowly passed a procedural vote in the House of Representatives and moved to a floor vote, with a self-imposed July 4th deadline for potential passage. However, its passage in its current form remained uncertain, as its projection to add trillions to the national debt and make deep cuts to popular programs like Medicaid caused hesitation among several House Republicans. In more encouraging news, President Trump announced on Truth Social that the U.S. had reached a trade deal with Vietnam. This agreement includes a 20% tariff on goods imported from Vietnam to the U.S. and a 40% tax on goods that other countries are shipping through Vietnam to the United States. This development, coming ahead of the July 9th expiration of Trump's retaliatory tariff pause, was welcomed by investors as it eased concerns over prolonged trade tensions.

Single-stock performance reflected these broader market and political currents. Nike (NKE) jumped 4.2% following the announcement of the Vietnam trade deal, as Vietnam serves as a major importer and manufacturing hub for the athletic apparel and footwear company, making it the best performer in the Dow Jones Industrial Average for the day. Conversely, UnitedHealth Group (UNH) was the worst Dow performer, losing 5.6%, impacted by headwinds from fellow insurer Centene (CNC). Centene itself plunged a dramatic 40.3%, making it the worst S&P 500 stock on Wednesday. The health insurer withdrew its full-year guidance, citing rising Medicaid costs and preliminary 2025 health insurance marketplace data showing lower-than-expected overall market growth in at least 22 states. Centene anticipated a roughly $1.8 billion hit to its top line and a $2.75 impact on earnings per share, leading to a downgrade from UBS Global Research. Meanwhile, Tesla (TSLA) rose 5%, bouncing back after an early week drop, despite posting a significant decrease in second-quarter deliveries that were nonetheless less severe than analysts' bleak forecasts. The stock had shed over 20% this year prior to this gain.

Regarding other commodities, oil prices pulled back after posting their strongest gain in nearly two weeks. Brent crude traded near $69 a barrel and West Texas Intermediate (WTI) above $67, as investors monitored ongoing U.S. trade negotiations and anticipated an upcoming OPEC+ meeting. Focus was shifting back to trade talks and associated tariffs that could impact oil demand, as well as the expected agreement on increased supply quotas from OPEC+.

As a reminder for investors, U.S. stock and bond markets were scheduled to close early on Thursday, July 3rd, at 1 p.m. and 2 p.m. Eastern Standard Time, respectively. Friday, July 4th, would be a full stock market holiday in observance of Independence Day.