[New York Stock Exchange] S&P, Nasdaq Hit New Highs Again as US-Canada Resume Tariff Talks... Optimism Over Trade Agreement

S&P and Nasdaq Hit Record Highs for Second Consecutive Day
Canada Resumes Trade Talks with U.S. After Withdrawing Digital Tax
Trump Increases Pressure Ahead of Mutual Tariff Suspension Expiration
Expectations Rise for Additional Trade Deals Before Tariff Suspension Ends
Focus on Tax Cut Bill and Upcoming Employment Data Releases

All three major indexes on the New York Stock Exchange closed higher on June 30 (local time). Optimism that trade negotiations between the United States and major trading partners will make progress before the expiration of the mutual tariff suspension on July 8 pushed the S&P 500 and Nasdaq indexes to record highs for the last trading day of June.

Reuters Yonhap News

On this day, the blue-chip Dow Jones Industrial Average closed at 44,094.77, up 275.5 points (0.63%) from the previous session. The large-cap S&P 500 index rose 31.88 points (0.52%) to finish at 6,204.95, while the tech-heavy Nasdaq index gained 96.27 points (0.47%) to end at 20,369.73. Both the S&P 500 and Nasdaq set new all-time highs for the second consecutive day.

Investor expectations for progress in major trade negotiations ahead of the expiration of the U.S. mutual tariff suspension on July 8 fueled the rally. In particular, relief spread after Canada withdrew its plan to impose a digital tax on domestic and foreign IT companies on June 29, just two days after criticism from U.S. President Donald Trump, and resumed trade negotiations with the United States. Previously, on June 27, President Trump had criticized Canada's digital tax plan as a non-tariff trade barrier targeting U.S. companies, warning of a halt in trade talks and notification of tariffs within a week. With the withdrawal of the digital tax plan the previous day, Canada secured an additional three weeks for trade negotiations with the United States. This follows an agreement reached between Canadian Prime Minister Mark Carney and President Trump during the G7 summit held in Canada on June 16-17 to conclude a new trade agreement within 30 days.

The Trump administration is increasing pressure on trading partners as the expiration of the mutual tariff suspension approaches.

On this day, President Trump used his social media platform, Truth Social, to say, "I want to show how much the United States has spoiled other countries," adding, "I respect Japan, but even though they are experiencing a major rice shortage, they refuse to import our rice." He continued, "In other words, we will send them a letter," and added, "We want to keep them as a trading partner for years to come." This is interpreted as urging Japan to take a more proactive stance in removing trade barriers and pressing for a swift agreement.

In a Fox News interview released the previous day, President Trump also expressed a negative stance on extending the mutual tariff suspension. He said, "I don't think an extension is necessary," adding, "What we will do is send letters to all countries before July 9." Regarding tariff rates, he said, "It could be 25%, 35%, 50%, or 10%."

U.S. Treasury Secretary Scott Besant and White House Press Secretary Karoline Leavitt, among other aides, also warned that trading partners could face mutual tariffs after July 8.

Earlier, President Trump had implemented mutual tariffs in early April, granting a 90-day suspension for country-specific tariffs except for the basic 10% tariff. The United States has been negotiating with major trading partners during this suspension period, aiming to reach trade agreements. Meanwhile, Bloomberg reported the previous day that the United States is nearing trade agreements with some countries, including Taiwan and Indonesia.

Pawad Razakzada, a market analyst at City Index and Forex.com, said, "Progress in trade negotiations could be the biggest catalyst for financial markets," and analyzed, "Unless there is a major escalation in Middle East issues or a trade war, it is unlikely that the stock market will be significantly impacted by macroeconomic indicators."

The market is also closely watching whether the so-called "one big, beautiful bill," which contains President Trump's major tax cut pledges, will pass Congress. The U.S. Senate began the "Vote-a-Rama" procedure at 9 a.m. on this day regarding the bill. Known as a "voting marathon," this procedure allows for unlimited amendments and repeated votes until the final vote. President Trump has set a goal of completing all procedures, including signing, by Independence Day on July 4. However, there is concern that the tax cut bill could widen the fiscal deficit, which could lead to defections even within the Republican Party, making it difficult to be optimistic about its passage. The market is also speculating that if the tax cut bill, which raises concerns about the fiscal deficit, passes, the U.S. financial market could react sensitively, with government bond yields rising due to a decline in the country's mid- to long-term economic credibility.

Key economic indicators scheduled for release this week include the Labor Department's Job Openings and Labor Turnover Survey (JOLTs) for May on July 1, ADP's private employment report for June on July 2, and the Labor Department's June employment report on July 3. The market is expected to use these employment indicators to gauge the economic impact of President Trump's tariffs and other factors.

U.S. Treasury yields were slightly lower. The benchmark 10-year Treasury yield, a global bond market benchmark, fell 2 basis points (1bp=0.01 percentage point) from the previous session to 4.22%, while the policy-sensitive 2-year Treasury yield was down 1bp to 3.73%.

By stock, Moderna rose 1.58% after announcing that its experimental flu vaccine showed positive results in late-stage clinical trials. Apple jumped 2.03%, while Microsoft and Nvidia gained 0.3% and 0.15%, respectively. Tesla fell 1.89%.