New York (AFP) – Wall Street stocks pushed into new record territory on Monday amid optimism the United States would reach trade deals ahead of a self-imposed deadline next week and extend tax cuts. Canada said on Sunday it would restart trade negotiations with the United States after it rescinded a tax affecting US tech firms that had prompted US President Donald Trump to halt talks. That boosted optimism that other governments would make deals with Trump to avoid his steep levies, as the July 9 cut-off for tariff reprieve looms.
“Investors seem confident trade deals will be struck, geopolitical tensions ease and a major economic slump is avoided,” said Dan Coatsworth, investment analyst at AJ Bell. “The big unknown is whether investors are correct or are simply being too complacent,” he added. Officials from Japan and India have extended their stays in Washington to continue talks, raising hopes for agreements with two of the world’s biggest economies.
On Wall Street, both the S&P 500 and Nasdaq Composite finished higher in the final session of the second quarter, adding to last week’s records. The S&P 500 finished at 6,204.95, up 0.5 percent for the day and around 10.6 percent for the quarter. Trade optimism also helped boost most Asian stocks, but Europe’s main indices slid lower. Briefing.com analyst Patrick O’Hare said Wall Street’s “positive disposition follows the weekend update that the Senate passed a procedural vote that will set up its version of the ‘One Big, Beautiful Bill’ for a full Senate vote tonight”.
Trump’s signature domestic policy bill extends tax cuts from his first term at a cost of $4.5 trillion while, among other things, beefing up border security and placing new restrictions on public health insurance programs. The Republican president has ramped up pressure to get the package to his desk by July 4 and called out wavering lawmakers from his party. However, there are worries about the impact on the economy, with the non-partisan Congressional Budget Office estimating the measure would add nearly $3.3 trillion to US deficits over a decade.
There was little major reaction on Monday to data showing the contraction in Chinese factory activity eased further in June after a China-US trade truce. However, investors will be keeping an eye on data this week, and a key US jobs report on Thursday will be pored over for signs of the pace of interest-rate cuts. “This could be the make-or-break moment for July rate cut expectations,” said City Index and FOREX.com analyst Fawad Razaqzada. Only one in five investors currently see the Federal Reserve cutting interest rates at its July meeting, according to the CME’s FedWatch tool. But they expect it to cut two or three times later this year.
Trump’s indication he could choose a successor to Federal Reserve boss Jerome Powell within months is also leading investors to ramp up rate cut bets.
– Key figures at around 2040 GMT –
New York – Dow: UP 0.6 percent at 44,094.77 (close)
New York – S&P 500: UP 0.5 percent at 6,204.95 (close)
New York – Nasdaq Composite: UP 0.5 percent at 20,369.73 (close)
London – FTSE 100: DOWN 0.4 percent at 8,760.96 (close)
Paris – CAC 40: DOWN 0.3 percent at 7,665.91 (close)
Frankfurt – DAX: DOWN 0.5 percent at 23,909.61 (close)
Tokyo – Nikkei 225: UP 0.8 percent at 40,487.39 (close)
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 24,072.28 (close)
Shanghai – Composite: UP 0.6 percent at 3,444.43 (close)
Euro/dollar: UP at $1.1785 from $1.1718 on Friday
Pound/dollar: UP at $1.3732 from $1.3716
Dollar/yen: DOWN at 143.98 yen from 144.65 yen
Euro/pound: UP at 85.82 pence from 85.42 pence
West Texas Intermediate: DOWN 0.6 percent at $65.11 per barrel
Brent North Sea Crude: DOWN 0.2 percent at $67.61 per barrel
© 2024 AFP
