TLDR
- US stock futures rose Monday morning on trade deal optimism, with Dow futures up 0.5%, S&P 500 futures up 0.5%, and Nasdaq futures up 0.7%
- Canada scrapped its digital services tax on US tech firms late Sunday, hours before it was due to take effect, to advance stalled trade negotiations
- S&P 500 and Nasdaq reached new record highs on Friday for the first time since February, ending months of tariff-related volatility
- A July 9 deadline approaches for countries to reach trade deals with the US or face higher tariffs, though Trump said he may extend or shorten the deadline
- Senate Republicans pushed Trump’s $4.5 trillion tax cut bill forward in weekend sessions, with votes on amendments scheduled for Monday
US stock markets opened higher Monday as progress in trade negotiations lifted investor confidence and pushed major indexes toward new all-time highs. The gains come after a volatile first half of 2025 dominated by trade tensions and tariff concerns.
Dow Jones Industrial Average futures climbed 0.5% in early trading. S&P 500 futures gained roughly 0.5%, while tech-heavy Nasdaq 100 futures jumped 0.7%.
The rally follows Friday’s strong close when both the S&P 500 and Nasdaq Composite reached new record highs. These were the first record closes since February, marking the end of months of market turbulence caused by trade policy uncertainty.
Canada made a key move late Sunday by scrapping its digital services tax on US technology companies. The tax was set to take effect Monday but was canceled to help advance stalled trade talks with the United States.
The Canadian decision boosted shares of major tech companies in premarket trading. Amazon, Meta Platforms, Alphabet, and Apple all gained between 0.6% and 1.7%.
Trump had abruptly halted trade talks with Canada on Friday, specifically citing the digital tax policy. This caused a late-day dip in stock prices before the weekend.
Trade Deadline Approaches
A critical July 9 deadline now looms for countries to finalize trade agreements with the US. Without deals, Trump’s unilateral tariffs could resume at higher levels.
However, Trump indicated Sunday he may not need to extend the deadline. He also suggested the timeline could be made “shorter” depending on negotiations.
India has extended its Washington visit to work on finalizing a trade deal. Trump administration officials confirmed last week that a trade framework with China is now in place.
Senate Republicans advanced Trump’s proposed $4.5 trillion tax cut bill over the weekend. The legislation faces a marathon session of amendment votes beginning Monday at 9 AM.
The Congressional Budget Office estimates the tax package would add $3.3 trillion to the federal deficit over ten years. Republican leaders are working to convince party holdouts to support the measure.
Bank Stocks Gain on Stress Test Results
Major US banks saw their shares rise after passing the Federal Reserve’s annual stress tests. Twenty-two of the largest banks demonstrated they could weather a severe economic downturn while continuing to lend.
The positive results may allow banks to increase capital distributions to shareholders through dividends and stock buybacks. JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo gained between 0.4% and 1.9%.
Technology sector strength also contributed to Monday’s gains. Investors remain optimistic about artificial intelligence developments and the potential for Federal Reserve interest rate cuts.
Several Fed officials, including Chair Jerome Powell, are scheduled to speak this week. Key economic data releases include June jobs numbers and manufacturing surveys.
Markets will close early Thursday at 1 PM and remain closed Friday for the July 4th holiday. Despite recent record highs, the S&P 500, Nasdaq, and Dow are tracking toward their weakest first-half performance since 2022.
Juniper Networks jumped 8.4% after the Justice Department settled its lawsuit over Hewlett Packard Enterprise’s $14 billion acquisition of the networking company.
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