US stocks inched further into record territory on Monday, as Wall Street continued its upward momentum heading into the final days of a second consecutive winning month, the Associated Press reports.
Investors were buoyed by signs of easing trade tensions and a steady, if cautious, economic outlook.
By midmorning, the S&P 500 had risen 0.2%, following a strong rebound from a spring decline that saw the index drop nearly 20%. The Dow Jones Industrial Average gained 146 points, or 0.3%, while the Nasdaq Composite added 0.2%.
The uptick came after Canada announced the withdrawal of a proposed digital services tax targeting US technology companies and the resumption of trade talks with Washington. President Donald Trump had previously suspended negotiations in response to the planned tax, calling it “a direct and blatant attack.”
Markets responded positively to the renewed dialogue, which added to optimism that Trump’s pending tariffs on several trading partners — currently paused — might be delayed or softened if agreements are reached before their scheduled activation in the coming days.
One key factor behind the market’s recent recovery has been the belief that the White House could pull back on tariff threats if economic or market risks increase. Analysts at Deutsche Bank noted that previous cycles — in 2018 and 2019 — saw trade policy escalate during market rallies, followed by rollbacks when stock prices faltered.
“Despite the rhetoric to the contrary, this dynamic looks alive and well,” Deutsche Bank strategists wrote in a note, suggesting that actual tariff implementation may depend on how markets and the economy respond.
In an interview on Fox News Channel over the weekend, Trump reiterated that unless trade deals are reached soon, new tariff measures would be enacted.
“Letters will start going out pretty soon,” he said.
Several companies were in the spotlight Monday due to merger news and regulatory updates:
GMS Inc. surged 11.8% after announcing an acquisition deal with a Home Depot subsidiary valued at approximately $5.5 billion, including debt. The offer of $110 per share eclipsed a prior bid from QXO of $95.20 per share.
QXO shares rose 1.9%, while Home Depot stock dipped 0.5%.
Hewlett Packard Enterprise (HPE) rallied 13.1% and Juniper Networks gained 8.4% after the companies reached an agreement with the US Department of Justice that could pave the way for their $14 billion merger, pending court approval.
Investors are also watching for fresh data on the health of the labor market. The highlight of the week will be Thursday’s jobs report, released a day early due to the Fourth of July holiday. Economists expect 115,000 jobs added in June, down from 139,000 in May, suggesting a modest cooling in hiring.
The Federal Reserve has held interest rates steady so far this year, awaiting clearer signs of how trade policies and global demand are affecting inflation and growth. Fed Chair Jerome Powell has emphasized a data-driven approach, saying decisions on rate cuts will depend on incoming economic indicators.
However, President Trump has been pressing for more aggressive cuts, and some of his appointees to the Fed have indicated they may be open to easing rates at the central bank’s next meeting in less than a month.
In the bond market, the yield on the 10-year US Treasury slipped to 4.27%, down from 4.29% on Friday, reflecting investor caution ahead of the jobs data.
Overseas, European markets saw modest declines, while results in Asia were more varied. Hong Kong’s Hang Seng Index fell 0.9%, while Shanghai’s composite rose 0.6% on news that China’s factory activity showed slight improvement in June. However, the manufacturing sector remains in contraction despite a temporary pause in US–China tariff escalations.
