Stocks edge up to fresh record on trade optimism
Business
Stocks edge up to fresh record on trade optimism
NEW YORK (Reuters) - Global stocks were higher on Monday on hopes US trade negotiations with key partners would continue to progress, while the dollar slipped and was on track for its worst first half performance in over 50 years.
Canada halted its digital services tax targeting US technology firms just hours before it was due to take effect, in a effort to advance stalled trade negotiations with Washington.
Canadian Prime Minister Mark Carney and US President Donald Trump will resume trade negotiations in an attempt to agree on a deal by July 21, in an extension from Trump's original July 9 deadline for "reciprocal" tariffs.
The July 9 deadline still holds for other countries, although officials have suggested most deals could now be done by the September 1 Labor Day holiday.
On Monday, US Treasury Secretary Scott Bessent said countries "should be aware" that the US could move back to the tariff levels on April 2, when Trump announced a wide array of steep duties against countries around the globe, and that the decision for any extension to negotiations would be up to Trump.
"We've got this deadline coming, but then Trump has said that the deadline can be moved. And then you've got markets thinking that the Fed could potentially cut interest rates sooner than later. So there are a lot of drivers here," said Dennis Dick, a trader at Triple D Trading in Ontario, Canada.
"Investors are just confident here in this market right now, because we've had some bad news come in, even some bad earnings reports, and they buy the stocks right back. So bulls remain in complete control."
On Wall Street, US stocks rose modestly after the S&P 500 and Nasdaq closed at record highs on Friday, led by gains in financial names while utilities were the worst performing of the 11 major S&P sectors.
The Dow Jones Industrial Average rose 108.95 points, or 0.25%, to 43,928.53, the S&P 500 rose 8.91 points, or 0.14%, to 6,181.98 and the Nasdaq Composite rose 30.67 points, or 0.15%, to 20,302.84.
Investors will eye a flurry of labor market data in the holiday-shortened trading week, culminating in Thursday's government payrolls report. The report is scheduled for release a day early, while the US stock market will have a shortened session on Thursday and be closed on Friday due to the Independence Day holiday on July 4.
The BIS warns that US trade policy risks a global financial panic.
Some Fed officials, including Chair Jerome Powell, have said the strength of the labor market gives the central bank the leeway to hold off on cutting interest rates until they can get a better sense of the impact Trump's tariffs will have on inflation.
Federal Reserve Bank of Atlanta President Raphael Bostic said Monday that the economy has yet to face the full impact of Trump’s trade tariffs.
Investors were also monitoring the progress of a huge US tax-cutting and spending bill slowly making its way through the Senate, which Republicans will try to pass on Monday.
The Congressional Budget Office estimated the bill would add $3.3 trillion to the nation's debt over a decade, testing foreign appetite for US Treasuries.
