S&P 500 Forecast: SPX muted despite a weak ADP payroll report

US futures

Dow futures -0.2% at 44412

S&P futures -0.04% at 6193

Nasdaq futures 0.04% at 22480

In Europe

FTSE -0.47% at 8745

DAX 0.04% at 23718

• US stocks are unchanged for a second session
• ADP payrolls fell by 33k, defying expectations of a 95k rise
• The Senate voted through Trump’s bill by 51-50
• Oil rises modestly with Iran in focus

ADP payrolls fell by 33k

US stocks open in a muted fashion despite the ADP payroll report raising concerns over the labour market, and as investors continue to monitor trade talks ahead of the July 9 deadline.

The ADP payroll showed that US private payrolls unexpectedly fell by 33,000 in June, and job gains in the previous month were smaller than initially thought. The data comes after Federal Reserve chair Jerome Powell said yesterday that a July rate cut isn't off the table.

With this in mind, the focus now turns to the more comprehensive nonfarm payroll report scheduled for release tomorrow, as the markets are closed on Friday for the Independence Day holiday. The data is expected to show that job growth cooled in June to 210,000 and that the unemployment rate ticked higher to 4.3%. A significantly weaker than expected report could add to July rate cut expectations.

Following today's data, the market increased its bets on a July rate cut to 27% from around 20% prior to the report.

Meanwhile, trade talks remain in focus after Trump said he is not looking to extend the July 9 deadline for imposing tariffs. He also expressed doubts over an agreement being reached with Japan; the one with India is expected to cross the line.

The US Senate also passed Trump's massive tax and spending bill on Tuesday by 51 to 50. It's fun seeing the package, which includes generous tax cuts, a reduction in social safety net programs, and higher military spending, which could add $ 3.3 trillion to national debt levels. Trump is keen for the bills passed by the House of Representatives to be signed quickly before the end of the week.

Corporate news

Tesla is opening 5% higher, recouping yesterday's 5% losses despite Q2 deliveries missing expectations. Tesla delivered 384,122 vehicles in the second quarter of 2025, falling short of consensus estimates of 390,100 units. This was also below the 443,956 deliveries reported in the same quarter last year.

JP Morgan and Bank of America, which includes Wells Fargo, rose after the announcement that they intend to raise their Q3 dividends following the Fed's annual stress test.

S&P 500 forecast – technical analysis

The S&P 500 extended gains to fresh record highs at 6220. The RSI is tipping into overbought territory, so there could be some consolidation around here. With blue skies above, 6250 and 6300 are the next levels to be watching for. Support can be seen at 6150, the February high, and below here 6050 and 6000. A break below 5930 is needed to create a lower low.

FX markets – USD rises, EUR/USD falls

The USD is rising after Trump’s bill passed the Senate vote and despite very weak ADP payroll data. The recent USD drop to multi-year lows was also looking a little overstretched technically.

The EUR/USD is falling amid a stronger USD and as investors continue to digest ECB President Lagarde’s remarks at the central bankers' forum. Lagarde noted that the region faces increased volatility in inflation. Yesterday's data showed that the CPI rose to 2%, the ECB’s target level.

GBP/USD is after PM Starmer doesn't rule out tax rises to pay for welfare concessions. The U-turn to pass welfare reforms means that money is no longer being saved, and the Chancellor’s margin has been slashed, making tax hikes more likely.

Oil rises with Iran in focus

Oil prices are rising on Wednesday after Iran suspended cooperation with the UN nuclear watchdog, and as the market expects more supply from OPEC+.

The market is pricing in some geopolitical risk premium after Iran stipulated that future inspections of its nuclear sites by the International Atomic Energy Agency must first be approved by Tehran's Supreme National Security Council. This is a sentiment-driven move, as the supply remains unaffected.

Meanwhile, planned increases by OPEC+ in the coming meeting could limit the upside in oil prices, particularly given the uncertainty surrounding Trump’s tariffs and the impact on demand.