S&P 500, Nasdaq hit record closing highs amid trade negotiations, rate cut bets
Wall Street extended its rally on Friday, sending S&P 500 and Nasdaq to record closing highs as trade deal hopes fueled investor risk appetite and economic data helped solidify expectations for rate cuts from the U.S. Federal Reserve.
Stocks pared gains after U.S. President Donald Trump terminated trade negotiations with Canada in response to its digital tax on technology companies
Even so, all three major U.S. stock indexes posted weekly gains.
The Personal Consumption Expenditures report from the Commerce Department showed consumer income and spending unexpectedly contracted in May. And while tariffs have yet to affect price growth, inflation continues to hover above the Fed’s 2% annual inflation target.
A separate report from the University of Michigan confirmed consumer sentiment has improved this month, but remains well below December’s post-election bounce.
Financial markets have priced in a 72% likelihood that the Fed will implement its first rate cut of the year in September, with a smaller, 21% probability of a rate cut coming as soon as July, according to CME’s FedWatch tool.
Washington and Beijing reached an agreement to expedite rare-earth shipments to the U.S., a White House official said, well ahead of the July 9 expiration of the 90-day postponement of U.S. President Donald Trump’s "reciprocal" tariffs.
Additionally, U.S. Treasury Secretary Scott Bessent said the Trump administration’s trade deals with 18 of the main U.S. trading partners could be done by the September 1 Labor Day holiday.
According to preliminary data, the S&P 500 gained 31.93 points, or 0.52%, to end at 6,172.95 points, while the Nasdaq Composite gained 105.55 points, or 0.52%, to 20,273.46. The Dow Jones Industrial Average rose 430.16 points, or 0.99%, to 43,817.00.
Source : Reuters
