S&P 500 opened flat on Wednesday after a new report showed private payrolls surprisingly decreased in June, raising concern over the state of the U.S. economy.

The private sector lost 33,000 jobs last month, according to the latest report by ADP. That marks the first monthly decline in ADP’s payrolls report since March 2023. Economists polled by Dow Jones expected payrolls to grow by 100,000.

The report comes with the stock market near record highs despite concerns that lingering trade tensions between the U.S. and other countries could slow U.S. and global economic growth.

To be sure, the ADP report has a lackluster record predicting the government’s monthly jobs report, which is due out Thursday. Economists expect growth of 110,000 jobs for June.

The market may also be taking some solace in growing expectations for a Federal Reserve rate cut later this month. The CME Group’s FedWatch tool shows a roughly 23% chance of the central bank lowering rates at its July meeting, up from 20% a day before.