Market Update
China Indexes Traded Down Amid Worries of Higher Hurdles for U.S. Exports
Li Chen
03 Jul, 2025
Hong Kong
Stocks in China and Hong Kong faced headwinds as investors feared higher hurdles for Chinese exports to the U.S.
The Hang Seng index declined by more than 1%, while the mainland-focused index fluctuated around the flatline.
Market sentiment soured after the U.S. struck a preliminary trade agreement with Vietnam that increases import tax to 20% on most shipments.
Transshipped goods from China will face a higher duty of 40%, raising fears that the Trump administration is targeting China.
Trade negotiators are signaling that the Chinese goods shipped through Mexico, Malaysia, Indonesia, and Thailand are likely to face similar punitive import taxes.
Economists are still holding out for the Chinese economy to expand by 5%, the target set by the central government, but export-linked companies may face serious business disruptions in the second half.
China Indexes and Stocks
The Hang Seng index decreased 1.1% to 23,970.64, and the mainland-focused CSI 300 index edged up 0.5% to 3,962.33.
Smartphone and electric vehicle makers traded down amid worries of higher import barriers to the U.S.
Xiaomi Corp. decreased 4.4% to HK $57.50, Li Auto Inc. declined 1.2% to HK $102.20, BYD gained 1.2% to HK $123.10, and Xpeng Inc. edged up 0.8% to $72.90.
Internet platform operators declined after Alibaba Group announced an incentive program to attract merchants and users.
Alibaba Group Holding declined 1.5% to HK $105.50, Tencent Holdings Ltd. fell 0.5% to HK $499.0, JD.com Inc. decreased 1.6% to HK $125.90, and Meituan dropped 2.4% to HK $122.90.
Investors Turn Cautious After Weak Private Payrolls Data
Barry Adams
02 Jul, 2025
New York City
Investors turned defensive ahead of the looming trade deadline next week amid a lack of visible progress.
The S&P 500 index edged 0.1% higher, and the tech-heavy Nasdaq Composite edged 0.2% lower as investors reviewed the latest private sector employment data.
The U.S. private businesses shed jobs for the first time in more than two years in June.
U.S. businesses cut 33,000 net jobs in June following a downwardly revised increase of 29,000 in May, according to the monthly survey released by ADP.
Private employer job additions have been on the declining trend since peaking in October 2024 and now turned negative for the first time since March 2023.
"Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month.
Still, the slowdown in hiring has yet to disrupt pay growth", said Dr. Nela Richardson, ADP's chief economist.
The annual pay growth slowed to annual rate of 4.4% from 4.5% in May, and eased to 6.8% from 7.0% for those seeking to change a job.
The ADP report is viewed with skepticism because of its volatile track record, and investors are now awaiting the release of June's nonfarm payrolls report on Thursday.
The U.S. Bureau of Labor Statistics is scheduled to release its monthly report on Thursday, and investors are anticipating payrolls to expand by at least 90,000.
Commodities, Currencies, Indexes, Yields
The S&P 500 index decreased 0.02% to 6,196.92, the Nasdaq Composite edged up 0.3% to 20,261.53, and the Russell 2000 index declined 0.1% to 2,194.32.
The yield on 2-year Treasury notes edged lower to 3.78%, 10-year Treasury notes increased to 4.30%, and 30-year Treasury bonds advanced to 4.84%.
WTI crude oil increased $0.65 to $66.10 a barrel, and natural gas prices edged higher by $0.06 to $3.48 a thermal unit.
Gold decreased by $2.19 to $3,336.10 an ounce, and silver edged up by $0.22 to $36.25.
The dollar index, which weighs the US currency against a basket of foreign currencies, increased by 0.24 to 97.05 and traded at the lowest level since April 2022.
U.S. Stock Movers
Centene Corporation plunged 29.5% to $39.90 after the health insurance company withdrew its full-year outlook.
The company anticipates the Medicaid Health Benefit Ratio in the second quarter to be higher than in the first quarter.
Moreover, the company revised lower its expected revenue in 22 of the 29 key markets and estimated the annual revenue shortfall to reach as high as $1.8 billion, which corresponds to an adjusted diluted earnings per share impact of $2.75.
"This preliminary estimate includes a projection of the remaining eight months of 2025 and is based on 2025 paid claims through April 30 from Wakely for the 22 states, as well as the company's membership estimates and morbidity trend estimates for both its members and the aggregate market, calculated by state," the company added in a statement to investors.
TechTarget Inc. dropped 9.6% to $9.56 after the company reported a wider loss in the latest quarter.