​​Stocks higher ahead of US jobs and services data, investors hope for Trump-Xi call​

​​​Trump-Xi call gives markets hope

​There was yet another positive session in US markets yesterday, on hopes that a call between Presidents Trump and Xi would help to move the US-China trade war towards a conclusion.

​Stocks continue to make gains despite the tariff uncertainty. Today marks the point at which US trading partners are meant to have submitted final offers to Washington or risk the reimposition of the full 2 April tariffs.

​But there’s more to watch. Tomorrow is the date when the original plaintiffs that got the tariffs struck down by a US court have to file papers explaining why they oppose the appeal court’s decision to suspend the first court’s ruling.

​8 July is when the 90-day tariff pause comes to an end for most nations, though the EU has an extra day.

​Just reading the above list will exhaust most investors. But with markets still rising the overall view appears to still be that the US is no longer serious about imposing tariffs at the levels seen in April. President Trump appears fixated on a call with China’s president that might help to move the situation forward, but Beijing remains wary of committing itself to any deal.

​This does leave markets open to another sudden shock, which might replicate some of the volatility seen in April. But that manic period appears to have dissuaded the administration from further major tariff announcements.

​Focus on ADP payrolls and ISM services PMI

​As we noted earlier in the week, the focus is on economic data. Today gives us the ADP employment report, providing a view of how many jobs were created in the US last month, though the real weight is on Friday’s payroll report.

​Other data to watch include the ISM services purchasing managers index (PMI). Monday’s manufacturing survey showed activity weakened in May, and investors will be waiting to see if a similar picture is seen in the services sector.

​Magnificent 7 are back – sort of

​US stocks have bounced back in May, mainly thanks to Big Tech. Seven companies, Nvidia, Microsoft, Meta, Broadcom, Amazon, Tesla, and Alphabet, drove most of the S&P 500's 7% gain, adding $2.4 trillion in value. Apple remains in the middle of trade tensions, so Broadcom has been included instead.

​Without them, the market rose only 3%. Some worry this kind of narrow rally is risky, while others see it as strong leadership from tech. Interestingly, their earnings forecasts haven’t really improved, so the surge may be more about hope, for example, easing US-China trade tensions, than actual business performance.