05:00 PM EDT, 06/04/2025 (MT Newswires) -- US benchmark equity indexes closed mixed Wednesday as investors evaluated a Federal Reserve report showing an economic contraction.

The Nasdaq Composite rose 0.3% to 19,460.5, while the S&P 500 ended nearly flat at 5,970.8. The Dow Jones Industrial Average fell 0.2% to 42,427.7. Communication services led the gainers among sectors, while energy saw the steepest decline.

The Fed said in its latest Beige Book that US economic activity "declined slightly" since late April as higher tariffs put upward pressure on prices.

"All districts reported elevated levels of economic and policy uncertainty, which have led to hesitancy and a cautious approach to business and household decisions," according to the Beige Book.

Fed Governor Lisa Cook said Tuesday that price increases due to tariffs may impede progress on inflation that remains "somewhat" above the central bank's 2% goal.

After agreeing last month to suspend most tariffs on each other's imports, the US and China recently accused each other of violating their preliminary trade deal. President Donald Trump said Wednesday that his Chinese counterpart, Xi Jinping, was "extremely hard to make a deal with." Media publications reported earlier this week that Trump and Xi could hold one-on-one talks on tariffs soon.

In April, Trump declared a 90-day pause on certain tariffs for countries that didn't retaliate to his reciprocal duties.

US Treasury yields were lower, with the 10-year rate slumping 11.4 basis points to 4.36% and the two-year rate losing 8.8 basis points to 3.88%.

Automatic Data Processing ( ADP ) reported that private sector employment grew last month at the slowest pace since March 2023. The increase fell well short of market expectations.

"After a strong start to the year, hiring is losing momentum," ADP Chief Economist Nela Richardson said. "Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers."

Responding to the ADP report, Trump said that Fed Chair Jerome Powell "must" lower interest rates immediately. Since taking office, the US leader has repeatedly called on the central bank chief to cut rates.

The Bureau of Labor Statistics is expected to report Friday that the US economy added 130,000 nonfarm jobs last month, which would mark a drop from a 177,000 increase reported for April, according to a Bloomberg poll.

Two surveys regarding the US services sector yielded contrasting results, with the Institute for Supply Management's data showing activity slipping into contraction territory in May, while S&P Global ( SPGI ) indicated a faster pace of growth.

"May's (purchasing managers' index) level is not indicative of a severe contraction, but rather uncertainty that is being expressed broadly among ISM services business survey panelists," said Steve Miller, chair of the ISM's services business survey committee.

Earlier in the week, ISM data showed that the US manufacturing sector contracted for third straight month in May, while an S&P Global ( SPGI ) survey indicated faster expansion sequentially.

Mortgage applications in the US declined for the third week in a row as potential borrowers waited for loan rates to fall more substantially, the Mortgage Bankers Association said.

West Texas Intermediate crude oil was down 1% at $62.78 a barrel.

Commercial crude stockpiles in the US decreased more than projected last week, while motor gasoline and distillate fuel logged gains, government data showed.

In company news, Dollar Tree ( DLTR ) shares tumbled 8.4%, the steepest decline on the S&P 500, after the discount retailer forecast an earnings drop of up to 50% for the ongoing three-month period amid the impact of tariffs.

CrowdStrike ( CRWD ) followed Dollar Tree ( DLTR ) on the S&P 500 Wednesday, down 5.8%. The cybersecurity firm said late Tuesday that it fiscal first-quarter earnings fell year-on-year, while revenue growth matched Wall Street's estimates.

Thor Industries ( THO ) shares jumped 4.3% after the recreational vehicle maker posted a surprise increase in fiscal third-quarter earnings and sales year over year and reiterated its full-year outlook despite macroeconomic uncertainties.

Gold was up 0.6% at $3,397.5 per troy ounce, while silver was little changed at $34.63 per ounce.