Market Monitor News June 05 (ON Semiconductor, DR Horton UP - Dollar Tree, Crowdstrike DOWN)

Wall Street Pauses as Weak Jobs and Services Data Raise Hopes for Fed Rate Cuts

Markets Trade Sideways After Mixed Economic Signals

U.S. equity markets treaded water on Wednesday, June 4, 2025, as investors digested a flurry of weaker-than-expected economic data. The Dow Jones fell 0.2%, while the Nasdaq added 0.3%, extending gains from Tuesday when the tech-heavy index erased its year-to-date losses. The S&P 500 closed flat.

Bond markets rallied as signs of a cooling labor market and slowing services activity sparked fresh hopes for interest rate cuts by the Federal Reserve. The 10-year Treasury yield dropped over 10 basis points, settling at 4.35%.

Jobs Growth Slows Sharply

Private sector employment grew by just 37,000 jobs in May, well below expectations of 110,000, according to payroll processor ADP. This marked the weakest job creation in more than two years. The disappointing figure contrasted with Tuesday’s surprisingly strong JOLTS report, which showed an uptick in job openings.

The weak jobs report prompted President Donald Trump to urge Fed Chair Jerome Powell to cut interest rates immediately, citing global peers like the European Central Bank that have moved more aggressively.

Services Sector Sends Mixed Signals

Two key services sector indicators sent conflicting messages. The S&P Global services PMI showed acceleration, rising from 50.8 to 53.7 in May. However, the ISM Services Index, considered more influential by markets, dropped from 51.6 to 49.9, dipping below the critical 50-mark that separates growth from contraction.

Tech Stocks Lead, While CrowdStrike and Dollar Tree Sink

Nvidia (NVDA | +0.5%) continued its meteoric rise, Hewlett Packard Enterprise (HPE | +0.85%) also impressed investors with better-than-expected quarterly earnings, despite margin pressures.

Not all tech stocks did well, though.

CrowdStrike (CRWD | -5.77%) slumped after reporting a $110 million net loss and issuing weaker-than-expected guidance.

The company continues to deal with lingering costs from a global IT outage it caused in July 2024. Despite surpassing adjusted EPS estimates, revenue disappointed and customer retention efforts are still weighing on margins.

Retail and Semiconductors See Diverging Fortunes

Dollar Tree (DLTR | -8.37%) tumbled even after topping Q1 earnings and revenue expectations.

The discount retailer warned of a 45–50% drop in Q2 profit due to tariff uncertainty and rising input costs. Still, it raised its full-year EPS forecast slightly to a range of $5.15 to $5.65.

In contrast, On Semiconductor (ON | +6.14%) surged following bullish remarks from CEO Hassane El-Khoury at the Bank of America Global Technology Conference. The chipmaker sees early signs of recovery in the industrial and automotive markets, which together account for 55% of its revenue. This came on the heels of an 11% gain on Tuesday, bringing the two-day rally to over 17%.

Other Noteworthy Movers

Guidewire Software (GWRE | +16.41%) jumped after lifting its full-year revenue outlook and beating Q1 expectations.

D.R. Horton (DHI | +4.38%) rose sharply, along with other homebuilder stocks, as falling Treasury yields and renewed pressure from former President Trump on Fed Chair Jerome Powell to lower interest rates improved the outlook for mortgage rates.

Commodities and Currency

Oil prices edged lower, with July WTI crude settling at $62.85, down 0.9%. The drop followed data from the EIA showing a significant decline in U.S. crude inventories.

Meanwhile, the euro strengthened by 0.3%, trading at 1.1414 against the dollar.

Outlook

Investors will be closely watching Thursday’s data, including weekly jobless claims, trade balance, and Q1 productivity and labor costs, for further clues on the Fed’s next moves.

Despite weaker economic signals, hopes for policy easing are offering support to equity markets, at least for now.

---

Next to read: ChartMill Market Monitor Trends & Breadth Analysis, Juni 05