Wall Street Rises As Trade Talks Resume Optimism

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Wall Street Rises As Trade Talks Resume Optimism/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks extend record highs, buoyed by trade optimism and corporate deal news. Investors watch for economic data and Fed rate decisions. Treasury yields ease ahead of the upcoming jobs report.

A currency trader watches monitors near a screen showing the Korea Composite Stock Price Index (KOSPI) at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, June 30, 2025. (AP Photo/Ahn Young-joon)

US Stock Market Rally Quick Looks

S&P 500, Dow, Nasdaq extend record highs
Trade hopes rise after Canada scraps digital tax
Trump warns tariffs could resume without trade deals
GMS surges on Home Depot acquisition news
HPE and Juniper gain on merger progress
Investors await crucial U.S. jobs report Thursday
Fed cautious on rates as inflation risks persist
Treasury yields ease slightly; global markets mixed

A board above the trading floor of the New York Stock Exchange shows the closing number for the S&P 500, Friday, June 27, 2025. (AP Photo/Richard Drew)

Deep Look

U.S. Stocks Rise Further Into Record Territory As Trade Optimism And Corporate Deals Lift Wall Street

NEW YORK (AP) — U.S. stocks pushed deeper into record territory Monday, as Wall Street continued its rebound and investors looked ahead to key economic data and potential developments in global trade negotiations.

The S&P 500 rose 0.2% in early trading, following its sharp recovery from a springtime slump that saw the index fall nearly 20%. The Dow Jones Industrial Average climbed 142 points, or 0.3%, to kick off the day, while the tech-heavy Nasdaq composite was up 0.2%.

Trade Hopes Fuel Investor Optimism

Markets were lifted by fresh signs of progress in North American trade relations. Canada announced it would drop its planned digital services tax targeting U.S. tech companies and resume trade negotiations with the United States. The tax, which was scheduled to take effect Monday, would have imposed a 3% levy on revenue from Canadian users earned by companies like Amazon, Google, Meta, Uber, and Airbnb. It threatened to leave U.S. firms with a retroactive $2 billion tax bill.

On Friday, President Donald Trump had suspended trade talks with Canada, calling the proposed tax “a direct and blatant attack on our country.” But following a phone conversation between Trump and Canadian Prime Minister Mark Carney, negotiations are back on track, easing investor concerns.

Tariff Tensions Still Loom

Despite the relief, investors remain cautious about Trump’s broader trade policies. The U.S. currently imposes a 10% baseline tax on most imported goods, with higher rates on Chinese products and specific tariffs on steel and autos. Many additional tariffs remain paused for now but are scheduled to take effect in just over a week unless deals are reached.

Speaking on Fox News Channel’s “Sunday Morning Futures,” Trump warned that countries will soon be notified that trade penalties will proceed if no agreements are finalized. Letters announcing potential tariff hikes are expected “pretty soon,” he said.

Corporate Deals Boost Individual Stocks

Several high-profile corporate deals helped fuel market momentum.

GMS, a specialty building products supplier, soared 11.3% after announcing it agreed to sell itself to a Home Depot subsidiary in a deal valued at approximately $5.5 billion, including debt. Home Depot offered $110.00 per share in cash, significantly higher than a previous bid from QXO, which had offered $95.20 per share earlier this month. Following the Home Depot announcement, QXO’s shares gained 2%, while Home Depot stock remained flat.

Meanwhile, Hewlett Packard Enterprise surged 12%, and Juniper Networks jumped 8.4%, after revealing they had reached an agreement with the U.S. Department of Justice that could allow their $14 billion merger to proceed, pending court approval.

Investors Eye Economic Data, Fed Moves

Market participants are now turning their attention to economic reports due later this week, particularly Thursday’s monthly jobs report. Traditionally the most anticipated piece of U.S. economic data, the report will arrive a day earlier than usual due to the Fourth of July holiday.

Economists expect a slowdown in hiring, with projections of 115,000 new jobs added in June, down from 139,000 in May. While the U.S. job market has stayed relatively solid despite trade uncertainties, hiring has cooled recently, keeping the Federal Reserve cautious about further interest rate cuts.

Fed Chair Jerome Powell has reiterated that the central bank is waiting for additional data on the economic impact of tariffs and inflation trends before adjusting rates. Lower rates can stimulate the economy but risk fueling higher inflation.

Trump has been vocal in pushing for more aggressive rate cuts. Two of his appointees to the Fed have signaled they could support cuts as soon as the Fed’s next meeting in less than a month.

Treasury Yields And Global Markets Mixed

In the bond market, Treasury yields eased modestly, reflecting cautious sentiment ahead of economic reports. The yield on the 10-year Treasury note fell to 4.26% from 4.29% late Friday.

Global markets presented a mixed picture. European indexes dipped slightly, while Asian markets finished with varied results. Stocks fell 0.9% in Hong Kong but gained 0.6% in Shanghai after China reported marginal improvement in factory activity for June. The manufacturing uptick followed the postponement of higher tariffs between Beijing and Washington, though China’s manufacturing sector remains in contraction territory.