In New York, the U.S. stock market continued its upward momentum, marking the end of another successful month on Monday. Wall Street wrapped up its second consecutive month of gains as the S&P 500 experienced a 0.5% rise, highlighting its remarkable bounce back from a significant downturn earlier in the year, which saw a nearly 20% decline. Meanwhile, the Dow Jones Industrial Average gained 275 points, or 0.6%, and the Nasdaq composite edged 0.5% higher.
A boost to the markets came with the news that Canada decided to reverse a proposed tax on U.S. technology companies and agreed to reopen trade negotiations with the United States. This development comes after President Donald Trump expressed displeasure with Canadaโs tax plan, labeling it as a direct offense to the United States, which had led him to halt trade discussions.
The quick rebound of U.S. stocks from the spring decline has been largely driven by optimism that President Trump might successfully negotiate terms with other nations that would lower tariffs he had previously suggested. Without such agreements, there are fears that trade conflicts could dampen economic growth and further drive inflation.
Most of Trumpโs proposed tariffs are currently on hold but are slated to potentially take effect in a little over a week. Analysts from Deutsche Bank, including Parag Thatte and Binky Chadha, warn that the marketโs current highs might provoke new rounds of tariff escalations. They cite past trends from 2018 and 2019 where market peaks led to increased tariffs that pushed markets down until the tariffs were eased, sparking rallies once more.
In the tech sector, Oracleโs shares surged by 4%, significantly lifting the S&P 500. Oracleโs CEO, Safra Catz, attributed the positive performance to a strong fiscal start and several significant cloud service agreements, including a lucrative deal projected to generate over $30 billion annually two years from now.
GMS saw its stock soar by 11.7% after announcing a sale to a Home Depot subsidiary, valuing the company at roughly $5.5 billion, including debt. This development comes just weeks after QXO offered to purchase GMS at a lower price per share. Following the announcement, QXOโs stock rose by 3.9%, while Home Depot shares slightly declined by 0.6%.
Additionally, Hewlett Packard Enterprise and Juniper Networks witnessed gains of 11.1% and 8.4% respectively after reaching an agreement with the U.S. Department of Justice facilitating their merger, subject to legal approval, marking a $14 billion transaction.
The banking sector also performed well post the Federal Reserveโs confirmation that banks are sufficiently robust to withstand potential economic downturns. JPMorgan Chase and Citigroup saw their stocks rise by 1% and 0.9%, respectively.
Overall, the S&P 500 climbed to 6,204.95 with an increase of 31.88 points. The Dow Jones saw an uptick to 44,094.77, while the Nasdaq rose to 20,369.73. On the bond front, Treasury yields fell as several key economic reports are expected soon, with a spotlight on Thursdayโs employment report, which traditionally garners significant attention. Due to the approaching Fourth of July holiday, this data release will occur earlier in the week than usual.
Despite trade tensions, the job market has remained stable, although there has been a noted slowdown in hiring rates. Economists predict a dip in job creation compared to previous months, expecting the June figures to reflect 115,000 new jobs, down from Mayโs 139,000.
The Federal Reserve has withheld further interest rate cuts, waiting on more concrete tariff impact data. Fed Chair Jerome Powell has emphasized the need for this data, particularly how tariffs might influence the economy and inflation. Lower interest rates could accelerate inflation while stimulating the economy.
President Trump, however, is advocating for more rate cuts imminently. Two individuals appointed to the Fed are considering the possibility of these cuts at the Fedโs impending meeting in the coming weeks.
Internationally, European stock indices saw a slight dip, following varied outcomes from Asian markets. While Hong Kong shares fell 0.9%, the Shanghai market rose by 0.6% following positive developments in Chinaโs manufacturing sector, stimulated by deferred tariff impositions between the U.S. and China.