US stocks saw mixed results on Tuesday as the Dow Jones Industrial Average climbed closer to record highs, while the S&P 500 and Nasdaq 100 edged lower, weighed down by declines in Tesla shares. Investors also digested the Senate's narrow approval of a significant tax and spending bill, which now faces uncertainty in the House of Representatives. Concerns over the bill's impact on the national debt have kept the US dollar under pressure. Asian markets followed suit with mixed trading on Wednesday, while euro area inflation data and German employment figures highlighted ongoing economic challenges in Europe, where markets are due to open higher on Wednesday.
US markets saw mixed performance on Tuesday as the Dow Jones Industrial climbed 0.9% to 44,494.94 points, narrowing its gap to record highs, while the S&P 500 and Nasdaq 100 declined slightly by 0.1% and 0.9%, respectively. Tesla shares fell 5.3% amid leadership changes and concerns over second-quarter sales, exacerbated by tensions between CEO Elon Musk and President Donald Trump over a new tax and spending bill. That extensive tax-cut and spending bill was approved narrowly by the US Senate on Tuesday, with Vice President JD Vance casting the tiebreaking vote in a 51-50 result. The legislation is expected to add USD 3.3 trillion to the national debt and now moves to the House of Representatives, where opposition from both conservative and moderate Republicans raises uncertainty about its passage. Concerns about the bill’s effect on the national debt, as well as other issues, has put US dollar under pressure in recent weeks with the US Dollar Index trading at 96.7, down from nearly 110.0 in January.
Asian equity markets were similarly trading with mixed sentiment on Wednesday. Japan’s Nikkei 225 was down 0.5%, while Korea’s Kospi fell 0.7%. In contrast, Australia’s S&P/ASX 200 was up 0.8%, supported by gains in energy stocks. Hong Kong’s Hang Seng Index added 0.5%, and mainland China’s CSI 300 was trading marginally higher, up 0.1%.
In macroeconomic data, the US JOLTs job openings data for June revealed a sharp rise to 7.769 million, surpassing the market expectation of 7.320 million and the previous figure of 7.395 million. This unexpected increase highlights a robust labour market and suggests potential economic strengthening, supporting the US dollar. The data, released by the US Bureau of Labor Statistics, reflects growing demand for workers, though it may challenge employers struggling to fill vacancies.
US manufacturing activity contracted for the fourth consecutive month in June, with the Manufacturing PMI rising slightly to 49 from 48.5 in May, according to the Institute for Supply Management. While production returned to expansion territory at 50.3, new orders and employment continued to decline, reflecting ongoing uncertainty due to tariffs and geopolitical tensions. Input prices rose further, driven by tariffs and higher steel and aluminium costs, while exports and imports remained in contraction.
Annual inflation in the eurozone increased to 2.0% in June 2025, up from 1.9% in May, according to Eurostat's flash estimate released on Tuesday. Services showed the highest annual inflation rate at 3.3%, slightly above May's 3.2%, while food, alcohol, and tobacco inflation eased to 3.1% from 3.2%. The data reflects continued price pressures in services and food, despite subdued energy costs. European equities closed mostly lower on Tuesday. The Euro Stoxx 50 lost 0.4%, while Germany’s DAX dropped 1% to 23,673.29 points, leading regional declines. France’s CAC 40 was nearly flat, slipping just 0.04%, while the Swiss Market Index (SMI) edged up 0.2%.
Employment in Germany remained flat in May 2025, with 45.8 million people employed, according to provisional data from Destatis. Seasonally adjusted figures showed no change from April, continuing the trend observed since December 2024. Year-on-year, employment declined slightly by 0.1%, with 64,000 fewer people employed compared to May 2024. Meanwhile, the seasonally adjusted unemployment rate held steady at 3.7%, despite a 6% annual increase in the number of unemployed individuals.
Corporate news in focus: There is no major corporate news scheduled today.
Economic data in focus: Euro-area unemployment rate (11:00), US ADP National Employment Report (14:15), European Central Bank President Christine Lagarde speaks (16:15).
Global economic and market trends at a glance
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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.