Overnight, the market's expectation for a Federal Reserve interest rate cut suddenly surged—The probability of a rate cut in September rose to over 90%, and it is expected that there will be a cut of about 55 basis points by the end of the year (at least two cuts of 25 basis points).

This is a substantial upgrade in interest rate cut expectations, and the reasons behind it are different from the past. Previously, the expectation of rate cuts increased due to escalating tariff threats, stemming from invisible, intangible, and hard-to-quantify concerns. But last night, it was due to worsening economic data that broke the market's imagined expectations.

· ADP added 37,000 jobs in May: a new low since March of last year, far below the market expectation of 114,000. Tariffs have already begun to impact companies' hiring intentions, and the overall resilience of the labor market is starting to weaken.

· The ISM Services Index fell below 50 (49.9): This is the first drop into the contraction zone in nearly a year. Meanwhile, input prices in the service sector remain high, indicating that corporate costs have not significantly eased. Considering that the service sector accounts for nearly 70% of U.S. GDP, a sustained contraction in the service sector will drag down overall GDP growth.

These two data points together convey a core signal: the impact of tariffs has already begun to penetrate American businesses, and the market views this situation from the perspective of disappointment in actual economic growth.

1. This is just the appetizer; the U.S. non-farm payroll data released this Friday and the U.S. inflation data released next week are crucial—they are key to assessing whether market expectations are reasonable. If these data continue to be imbalanced, the window for rate cuts will be almost certain; if there is resilience, the market will quickly adjust expectations, leading to a short-term correction.

2. For traders, dealing with tariff uncertainties means that one can go long one day and short the next. But for businesses, it is not so simple; it has substantially affected hiring and operational decisions—not merely a 'surface-level' cost transfer.

3. The data mentioned above still show the preliminary effects of tariffs on the economy, while the real impact will become apparent three months after the tariffs are implemented (the 'lag effect' of tariffs may intensively manifest in July and August). A series of economic data in July and August will begin to determine the Federal Reserve's decisions. Non-farm payrolls, CPI, PCE, ISM PMI, month-on-month retail sales, consumer confidence, etc., will all be 'event-driven nodes'.

When the market confirms that tariffs are not a 'temporary shock' but have persistent and cumulative negative effects on the economy, it will quickly transmit these expectations to the judgment that 'the monetary policy window will open early'.

After the data was released, Trump posted: 'The ADP data is out!!! The 'big delay' Powell now must cut rates. He is unbelievable!!! Europe has already cut rates nine times!'

This is also the first time Trump has commented on ADP data; in the past, he focused on non-farm data.

The global market trend has changed, trading logic has changed, everything is changing.