Wall Street edges up amid mixed signals from jobs data, China call and ECB pivot

Wall Street edges up amid mixed signals from jobs data, China call and ECB pivot

US stocks opened modestly higher on Thursday as markets digested a mixed bag of cues—renewed diplomatic contact between the US and China, soft labor market data, and a long-awaited rate cut from the European Central Bank.

The S&P 500 rose 0.2% in early trade, while the Nasdaq Composite advanced 0.3%, supported by continued strength in technology shares. The Dow Jones Industrial Average gained 48 points, or 0.1%, after snapping a four-day winning streak in the previous session.

Sentiment was briefly lifted after Chinese state media reported that US President Donald Trump and Chinese President Xi Jinping held a phone call, initiated by Trump, according to Beijing’s foreign ministry. The exchange sparked hopes of a potential thaw in trade relations, which had been a source of market anxiety in recent weeks.

The modest gains came despite fresh signs of weakness in the US labor market. Weekly jobless claims rose to 247,000—an increase of 8,000 from the prior week and higher than the Dow Jones estimate of 236,000. The data follows Wednesday’s ADP report showing private payrolls rose by just 37,000 in May, far below expectations of 110,000.

With a string of underwhelming labor prints now in focus, investor attention has shifted to Friday’s nonfarm payrolls report, which is expected to show a gain of 125,000 jobs in May—down from 177,000 in April. A sharper slowdown could renew calls for monetary easing by the US Federal Reserve, though officials have so far remained cautious amid sticky inflation.

“We are approaching an inflection point, where the concerns of stagflation can seep into the greater market narrative,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management. “We are seeing dropping productivity and slower growth, while also seeing signs of higher—or at least sticky—inflation.”

Despite the cautious tone, all three major US indexes are on track for weekly gains. As of Wednesday’s close, the S&P 500 was up 1% for the week, the Dow had added 0.4%, and the Nasdaq was ahead by 1.8%, led by large-cap tech.

Meanwhile in Europe, the European Central Bank delivered a widely anticipated 25-basis-point rate cut on Thursday—its first since 2019—lowering the deposit rate to 2% from a mid-2023 peak of 4%. The move, prompted by easing energy prices and a stronger euro, came alongside downgraded inflation projections, reinforcing expectations of further policy easing ahead. Markets had already priced in the cut, with LSEG data showing near-certainty going into the decision.