The American market remained unsettled due to the weak economic data

The US stock market fluctuated throughout the day, but did not show a serious decline, despite disappointing economic data and President Trump‘s statement that President Xi is “very tough and it is extremely difficult to make a deal with him.“ This statement did not contain any more context, however, amid rumors of a possible conversation between the leaders on Friday, it raised doubts about the prospects for trade negotiations between the United States and China, including tariff policy and potential restrictions.

The market as a whole remained in a narrow range amid low trading activity and a lack of clear signals from buyers and sellers. Nevertheless, capitalization—weighted market indexes have stayed afloat due to the relative strength of individual megacorporation stocks, primarily Meta Platforms (META +3.2%), Amazon (AMZN +0.7%) and NVIDIA (NVDA +0.5%). Their growth partially offset the decline in CrowdStrike shares (CRWD -5.8%) after the publication of a report with a disappointing revenue forecast, as well as a decline in Apple (AAPL -0.2%) after the Needham analysts lowered the recommendation from “Buy” to “Hold”.

The semiconductor sector once again stood out in a positive direction — the Philadelphia Semiconductor index rose by 1.4%, despite the general caution of market participants concerned about the slowdown in growth. Two key macroeconomic reports have increased concerns.

According to the ADP private Sector employment report, only 37,000 jobs were created in May (the forecast was 115,000), with small businesses losing 13,000 jobs. Later, the ISM index for the services sector for May reached 49.9%, reflecting a decrease in activity (below 50 points) — this happened only for the fourth time in the last 60 months.

Against the background of these data, government bond yields declined sharply: the yield on 2–year securities dropped from 3.96% to 3.88%, and on 10–year securities from 4.46% to 4.36%. The decline in yields was accompanied by a weakening dollar, but this did not become a reason for active stock purchases — the market took a break after rising by 23.5% from the low on April 7.

At the same time, the S&P 500 index is trading with a multiplier of 21.6 in terms of projected earnings for the next 12 months, which, according to FactSet, is 17% higher than the average over the past 10 years. The communications services sector grew by 1.4% and became the leader of the day. It was followed by materials and real estate (both categories +0.3%). The largest decrease was shown by the energy (-1.9%) and utility (-1.7%) sectors.

Our American FTinvest 11 portfolio also showed mixed dynamics today. In the morning, there was a strengthening, which, however, did not last long, and in the middle of the day there was a fall into the negative zone. However, at the end of the day, the index managed to regain its losses and eventually closed with an increase of 0.06% to the level of 753.81.