Core Insights - The US services sector showed slow expansion in June, with minimal growth despite a rebound in business activity and orders, while the employment index experienced its largest contraction in three months [1][6]. Economic Indicators - The ISM non-manufacturing index for June was reported at 50.8, slightly above the expected 50.6, and an increase from May's 49.9, indicating a return to expansion after a contraction [3]. - The business activity index returned to the expansion zone in June after stagnation in the previous month, while order quantities also saw moderate growth [4]. Employment and Pricing - The ISM employment index fell by 3.5 points to 47.2, marking the third contraction in four months, as service providers adjusted their workforce due to a rapid decrease in backlog orders [4]. - The prices index for materials and services decreased but remained near the highest levels since the end of 2022, indicating persistent price pressures in the services sector [4][7]. Economic Growth and Consumer Sentiment - The data reflects a slowdown in economic growth for the year, with consumers and businesses still grappling with the impacts of trade policies [6]. - The second quarter saw a steady expansion of the US economy at an annualized growth rate close to 1.5%, with service demand prompting the fastest increase in employment since January [6]. Future Outlook - There are concerns about the sustainability of business activity expansion in the coming months, with high price pressures persisting despite some easing in demand and competition [7]. - The overall inflation rate for service charges remains the second highest in over two years, potentially pushing consumer price inflation upward in the short term [7].

Group 1 - The U.S. House of Representatives passed a significant tax reform bill, which could potentially increase the national debt by approximately $3.8 trillion over the next decade, raising the current debt level of $36.2 trillion [1] - The stock market showed mixed results following the tax reform news, with the Dow Jones Industrial Average closing at 41,859.09, down 1.35 points, and the S&P 500 index down 2.60 points to 5,842.01, while the Nasdaq Composite rose by 53.09 points to 18,925.74 [1] - Among the 11 major sectors of the S&P 500, 8 sectors declined, with utilities and healthcare leading the losses at 1.41% and 0.76%, respectively, while consumer discretionary and communication services were the best performers, rising by 0.56% and 0.32% [1] Group 2 - Short-term economic benefits from the tax reform are anticipated, including GDP growth and increased spending, particularly in defense, which could stimulate the economy [2] - Long-term concerns regarding the tax reform include exacerbating the fiscal deficit, leading to rising yields and declining bond attractiveness, as noted by analysts [2] - The bond market showed some relief after Moody's downgrade of the U.S. credit rating, with the 30-year Treasury yield falling below 5.1% and the 10-year benchmark yield around 4.55% [2] Group 3 - The Federal Reserve is considering interest rate cuts if the Trump administration's tariff policies are less concerning than previously thought, with recent data indicating a rebound in U.S. business activity [3] - The preliminary S&P Global Composite PMI for May rose to 52.1 from 50.6 in April, indicating moderate economic expansion, although the labor market shows signs of weakness with rising unemployment claims [3] - Market expectations suggest at least two rate cuts of 25 basis points each by the end of the year, as investors monitor economic trends and fiscal policy developments [3]