Markets had rallied sharply in May, with the S&P 500 posting a 6% gain and reaching a post-tariff high of 5,970.81 on Wednesday. But escalating geopolitical risk and a mixed labor market backdrop are now testing that momentum.
Mixed Economic Data Raises Stakes for Friday’s Payrolls
A wave of U.S. economic releases on Thursday sent conflicting signals. Initial jobless claims rose to 247,000, surpassing expectations, while ADP private payrolls added just 37,000 jobs in May, missing the 110,000 forecast. Meanwhile, unit labor costs jumped 6.6% in Q1 and productivity fell more than expected, increasing pressure on corporate margins.
The May trade deficit narrowed sharply to $61.6 billion—the largest monthly drop on record—driven by a 16.3% plunge in imports as firms unwound inventory buildup from earlier tariff fears.
These figures paint a mixed picture: wage pressures remain elevated even as job growth softens and global trade cools. All eyes are now on Friday’s nonfarm payrolls report, with a print below the 125,000 consensus likely to revive rate-cut speculation.
Tech, Retail, and Software Stocks Lead Sector Movers
Despite broader market softness, pockets of strength emerged in tech and consumer names. MongoDB surged 17% after blowing past earnings expectations, while Verint Systems jumped 18% on strong revenue and margin performance.
Budget retailer Five Below climbed 7% after posting upbeat guidance and Q1 results, while Lands’ End added 8% after outlining strategies to offset tariff pressure.