The stock market got a surprise jolt Wednesday after President Donald Trump announced a new Vietnam trade deal, even as disappointing job data threatened to weigh down investor optimism.
In a post on Truth Social, Trump claimed the U.S. had reached a formal trade agreement with Vietnam. “We just finalized a beautiful deal with Vietnam,” Trump wrote. “It’s a great win for American jobs, and a powerful message to the world.”
While few details were officially released, the announcement includes a 20% tariff on Vietnamese imports, and a steep 40% tariff on goods re-exported from third countries through Vietnam. The move, analysts say, is aimed squarely at curbing indirect Chinese exports.
The S&P 500 reacted swiftly, surging to a new all-time intraday high of 6,215.80 before closing up 0.3%. The Nasdaq rose 0.8%, while the Dow dipped slightly by 32 points.
Retail and apparel stocks tied closely to Vietnamese manufacturing also saw quick swings. Nike jumped 3% midday before leveling off, reflecting its deep manufacturing ties in Vietnam. Other brands with heavy exposure, like Skechers, Columbia, and Lululemon, experienced brief rallies before stabilizing after tariff details emerged.
Despite the market bounce, concerns about the broader economy remain. A new ADP employment report revealed a shock loss of 33,000 private-sector jobs in June, marking the first drop since March 2023. Economists had predicted a gain of 100,000.
Ross Mayfield of Baird said, “We’ve seen weakness in the labor market for a while, but this negative print might finally get the Fed’s attention. They’ve been inflation-focused, but this data shifts the narrative.”
With the Federal Reserve’s July meeting looming, speculation of a rate cut is heating up. CFRA’s Sam Stovall added, “If weak jobs data continues with the official report Thursday, expect serious talk of slashing rates, especially now that Trump’s tariff moves are in play again.”
Experts are split on what the Vietnam trade deal really signals. On one hand, it diversifies U.S. trade beyond China, a strategy that both Democrats and Republicans have pushed. On the other, fresh tariffs could worsen global supply chain pressures and slow economic momentum.
Under the new agreement, Vietnam is expected to make regulatory concessions on intellectual property and open more sectors to U.S. investment. Still, the tariffs are steep, and analysts warn that consumer prices could rise.
The announcement also reopens debate about Trump’s economic strategy. The president previously leaned heavily on tariffs to pressure trade partners into new agreements. But Fed Chair Jerome Powell has said on record that Trump’s earlier 2025 tariff proposals were a primary reason for not cutting rates sooner.
“If the Fed was held back by Trump tariffs then, it might have even more reason to ease now, especially with real labor weakness,” Stovall added.
This may not be the last headline. Trump has hinted at further bilateral trade agreements, including one with India and potential talks with the EU over agricultural access.
Meanwhile, the House is still debating Trump’s tax-and-spend bill, narrowly passed in the Senate. Investors are closely watching the legislative outcome, which could affect consumer spending, corporate tax rates, and federal deficits.
Leo Cruz brings sharp insights into the world of politics, offering balanced reporting and analysis on the latest policies, elections, and global political events. With years of experience covering campaigns and interviewing world leaders, Leo ensures readers are always informed and engaged.
