SPX Claws Back 0.31% on Stronger ISM Services; ADP Job Losses Highlight Small Business Risks

This analysis is based on a December 3, 2025 YouTube video by Kevin Green [3], which discussed two key economic reports: a stronger-than-expected Institute for Supply Management (ISM) Services PMI and the ADP National Employment Report.

On December 3, the S&P 500 (SPX) closed 0.31% higher at $6836.23, rising from an open of $6815.29 [0], confirming Green’s description of the index “clawing back” from recent flat (December 1: 0.00%) and negative (December 2: -0.02%) performance [0]. This upward movement was driven by positive sentiment from the ISM Services report, which indicated growth in the U.S. services sector—accounting for over two-thirds of economic activity. While the exact November 2025 ISM Services figure wasn’t retrieved, October 2025 data shows a reading of 52.4 (expansionary, >50), and Green’s characterization of November’s print as “better” implies a reading above this level [1].

Sector performance reflected mixed economic signals. Services-related sectors led gains: Financial Services (+1.07%), Healthcare (+0.59%), and Consumer Cyclical (+0.56%) [0]. In contrast, Communication Services (-0.74%) was the worst-performing sector, indicating uneven reactions across services sub-sectors [0].

1. Increased Influence of Alternative Economic Reports
   : A recent U.S. government shutdown delayed official Bureau of Labor Statistics (BLS) employment data, making the ADP and ISM reports unusually influential for market sentiment and Federal Reserve policy expectations [2].
2. Services Sector Divergence
   : While the broader services sector showed resilience (via ISM Services PMI), the underperformance of Communication Services suggests uneven growth across services sub-industries, warranting further analysis.
3. SPX Trend Reversal
   : The 0.31% gain on December 3 reversed a two-day downtrend, indicating that the positive ISM Services data outweighed initial concerns from the ADP report in the short term.

1. Labor Market Weakness
   : The ADP report showed a 32,000 private job loss in November, led by small businesses (<49 employees), amid cautious consumers and macroeconomic uncertainty [2]. Persistent job losses could weigh on consumer spending and long-term economic growth.
2. Mixed Sector Performance
   : The divergence between leading (Financials, Healthcare) and lagging (Communication Services) sectors suggests uneven growth dynamics, which could contribute to market volatility.
3. Fed Policy Uncertainty
   : The shutdown-related delay in official BLS data prolongs uncertainty about potential Federal Reserve rate cuts, as policymakers rely on timely employment data to guide decisions [2].

The stronger ISM Services PMI signals resilience in the U.S. services sector, which could support continued growth in services-related industries. Monitoring upcoming reports (e.g., S&P Global Services PMI, weekly jobless claims) may clarify whether this trend is sustained.

• SPX Performance
  : Closed 0.31% higher on December 3, 2025, reversing recent flat/negative performance [0].
• ISM Services PMI
  : November 2025 reading likely above October’s 52.4 (expansionary) [1, 3].
• ADP Employment Report
  : Private sector lost 32,000 jobs in November, led by small businesses [2].
• Sector Performance
  : Services-related sectors (Financial, Healthcare) led gains; Communication Services lagged [0].
• Context
  : Government shutdown delayed official BLS data, increasing reliance on ADP/ISM reports [2].