Stock Market Today: Stocks mixed on tariff uncertainty, hiring slump

U.S. equity futures were mixed Wednesday, while the dollar sank to a three-month low against its global peers, as investors reacted to a potential compromise on tariffs while adjusting to a seismic change in German fiscal policy that will likely reverberate around the entire region.

Updated at 9:17 AM EST

Tariff confusion

Commerce Secretary Howard Lutnick's comments during a Bloomberg Television interview have added to confusion on the government's tariff plans and, alongside the weaker-than-expected ADP payroll report, pared earlier gains for U.S. stocks.

Lutnick, who said the President would make a statement on tariffs later this afternoon, less then 24 hours after imposing them on two of the nation's closest trading partners,  hinted at a potential compromise but also reiterated the need for the additional levies. 

The S&P 500 is now called 5 points lower at the start of trading with the Nasdaq priced for a modest 20 point bump.

US Commerce Secretary Howard Lutnick said President Donald Trump might consider giving Canada and Mexico some relief on tariffs, aiming to end up “somewhere in the middle” with a decision due later this afternoon https://t.co/it12d4urjn pic.twitter.com/cca4KjGUnP— Bloomberg TV (@BloombergTV) March 5, 2025

Updated at 8:27 AM EST

ADP jolt

The U.S. economy saw a notable softening private-sector job creation last month, suggesting tariff uncertainty and a pullback in consumer sentiment is having an impact on hiring into the early months of the new Trump administration.

Payroll-processing group ADP said around 77,000 jobs were created in the private sector last month, the lowest tally since Julye a sharp pullback from the upwardly-revised tally of 186,000 in January. Economists had expected ADP's National Employment Report to show gains of around 141,000 as hiring slowed into the middle of the first quarter.

Stock futures pared gains in the wake of the ADP release, with the S&P 500 called 10 points higher and the Nasdaq set for an 80-point advance at the start of trading. The Dow is priced for a 35-point gain.

Benchmark 10-year Treasury note yields held steady at 4.235% following the release, while 2-year notes were last pegged at 3.937% following their biggest two-day pullback of the year.

Private sector hiring slowed down in Feb according to ADP, +77K vs +186K in Jan. Smallest gain since July, with losses in trade, transportation, health care, education and information. #DOW +92 #NASDAQ +107.— Jason Brooks (@brookskcbsradio) March 5, 2025

Stock Market Today

Stocks ended firmly lower again Tuesday, with the S&P 500 sliding 1.22% and falling deeper into negative territory for the year. The market move followed the Donald Trump administration's introduction of tariffs on goods from Canada, Mexico and China and another warning on consumer spending from retail giant Target Corp.  (TGT) . 

Investors pared some of those declines in the afternoon session, however, following news that Germany's incoming chancellor, Friedrich Merz, plans to abandon the country's debt brake so as to invest billions in infrastructure and defense projects. 

The sudden stimulus, perhaps the biggest change to Germany's postwar economy since the country was reunified, sent German government-bond yields soaring, lifted the euro to a four-month high against the U.S. dollar and sparked a fresh record high for the regional Stoxx 600 benchmark. 

Comments from Commerce Secretary Howard Lutnick, meanwhile, suggested that Trump could be ready to compromise on the tariffs placed on goods within the USMCA treaty. whic he himself renegotiated during his last term in office, although the president defended his strategy in a speech to Congress last night. 

“Tariffs are about making America rich again and making America great again," the president said. "And it’s happening, and it will happen rather quickly. There’ll be a little disturbance, but we’re OK with that. It won’t be much.”

The uncertainty surrounding tariffs, however, has kept Wall Street on high alert, with the market's key volatility gauge, CBOE Group's VIX index, pegged at $22.85, near the highest levels since early December.

Related: Biggest U.S. bank overhauls stock market outlook amid tariff-linked slump

That suggests traders are expecting daily swings of around 1.42%, or 82 points, for the S&P 500 each day for the next 30 days. Yesterday's peak-to-trough move for the benchmark was around 133 points. 

Futures contracts tied to the S&P 500 suggest an opening-bell gain of around 38 points, with the Dow Jones Industrial Average called 252 points higher and the Nasdaq set for a gain of around 162 points.

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of its global peers, was marked 0.67% lower at 105.034 and trading at the lowest levels since early December. 

Benchmark 10-year Treasury note yields, meanwhile, were trading around 10 basis points higher from Tuesday levels at 4.246% heading into today's ADP Employment report at 8:15 am Eastern Time. 

In overseas markets, Germany's renewed fiscal vigor lifted the DAX more than 3.6% in midday Frankfurt trading, with the regional Stoxx 600 benchmark rising 1.54% after hitting a fresh all-time higher earlier in the session.

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Overnight in Asia, China's annual National People's Congress of party leaders set a 5% GDP growth target for the world's second largest economy, despite the U.S. tariff threat. That helped domestic stocks to solid session gains and lifted the regional MSCI ex-Japan benchmark 1.8% higher into the closing trading.

Japan's Nikkei 225, meanwhile, closed 0.33% higher, although trade war concerns capped gains and continue to test investor sentiment.

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