U.S. stocks dip with Tesla leading losses; investors eye jobs data and Fed signals as U.S.-China trade war jitters resurface.
June 5 (Reuters) – U.S. markets slipped on Thursday, weighed down by a decline in Tesla shares, as investors braced for Friday’s pivotal non-farm payrolls report. The mood on Wall Street remained cautious amid signs of a softening labor market and fresh tensions in the ongoing U.S.-China trade dispute.
Chinese President Xi Jinping and U.S. President Donald Trump held a phone conversation, reported by China’s state media agency Xinhua. The call comes at a tense moment, as both countries continue to spar over critical minerals, threatening to unravel the fragile ceasefire in their trade war.
Economic data released this week has added to investor concerns. On Wednesday, weaker-than-expected figures for U.S. private payrolls and the services sector raised red flags about the economic fallout from Trump’s protectionist policies. Adding to the anxiety, initial jobless claims showed a second consecutive weekly increase.
Kevin Gordon, senior investment strategist at Charles Schwab, noted, “I don’t think it’s some sort of big warning sign right now, but it speaks to the fact that the labor market has been softening and getting gradually weaker.”
The jobs data comes just ahead of the Federal Reserve’s June policy meeting. While President Trump continues to urge interest rate cuts, Fed Chair Jerome Powell has so far resisted, opting to wait for more economic clarity amid ongoing trade uncertainty.
Despite Thursday’s dip, equities have seen strong performance in recent weeks. In May, the S&P 500 and the Nasdaq both recorded their best monthly gains since November 2023, buoyed by a temporary softening of Trump’s trade tone and robust earnings.
However, the S&P 500 remains nearly 3% below its February peak. Key Fed officials, including Governor Adriana Kugler, Kansas City President Jeffrey Schmid, and Philadelphia President Patrick Harker, are expected to speak later today, potentially offering more insight into the central bank’s stance.
Market Snapshot (as of 10:20 a.m. ET):
- Dow Jones fell 126.69 points (-0.30%) to 42,301.05
- S&P 500 dropped 12.71 points (-0.21%) to 5,958.10
- Nasdaq Composite lost 31.13 points (-0.16%) to 19,429.36
Among the S&P 500 sectors, eight of 11 posted losses, led by a 1% decline in consumer staples. Jack Daniel’s parent Brown-Forman tumbled nearly 15% after forecasting a dip in full-year revenue and profit. Procter & Gamble slid 1.3% following its announcement to cut 7,000 jobs—roughly 6% of its workforce—over the next two years.
Tesla shares sank 4.5%, hitting a three-week low after data showed the automaker’s European sales declined for the fifth consecutive month.
Market breadth was negative, with declining stocks outnumbering advancers by a 1.08-to-1 ratio on the NYSE and 1.46-to-1 on the Nasdaq.
- S&P 500: 12 new 52-week highs, 3 new lows
- Nasdaq: 37 new highs, 16 new lows