Global stocks rose on Monday amid optimism that U.S. trade negotiations with key partners would continue making progress, while the dollar slipped and was on track for its worst first-half performance in more than 50 years.
In a bid to ease tensions, Canada paused its digital services tax targeting major U.S. technology firms just hours before it was due to take effect. The move was widely seen as an attempt to revive stalled trade negotiations with Washington. Canadian Prime Minister Mark Carney and U.S. President Donald Trump are expected to resume negotiations in hopes of reaching a deal by July 21, extending the earlier July 9 deadline set by Trump for reciprocal tariff agreements. While the July 9 deadline remains in place for other countries, officials now believe most agreements could be finalized by the September 1 Labor Day holiday.
U.S. Treasury Secretary Scott Bessent cautioned that if talks falter, the administration may return to the tariff levels imposed on April 2, when Trump first announced sweeping duties on a wide range of countries. Bessent noted that any extension of the negotiation period would be at the president’s discretion.
“We’ve got this deadline coming, but then Trump has said that the deadline can be moved. And then you’ve got markets thinking that the Fed could potentially cut interest rates sooner than later. So there are a lot of drivers here,” said Dennis Dick, a trader at Triple D Trading in Ontario. “Investors are just confident here in this market right now, because we’ve had some bad news come in, even some bad earnings reports, and they buy the stocks right back. So bulls remain in complete control.”
On Wall Street, U.S. stocks rose modestly after the S&P 500 and Nasdaq closed at record highs on Friday. The Dow Jones Industrial Average rose 108.95 points, or 0.25%, to 43,928.53. The S&P 500 gained 8.91 points, or 0.14%, to 6,181.98, while the Nasdaq Composite added 30.67 points, or 0.15%, to close at 20,302.84.
Investors are focused on a busy week of labor market data, including Thursday’s payrolls report, which will be released a day early due to the July 4 Independence Day holiday. U.S. financial markets will close early on Thursday and remain shut on Friday.
Federal Reserve officials, including Chair Jerome Powell, have suggested the strength of the labor market gives the central bank flexibility to delay interest rate cuts until there is greater clarity on the inflationary impact of Trump’s tariffs. Atlanta Fed President Raphael Bostic said Monday that the U.S. economy has not yet fully felt the effects of the tariffs.
Markets were also watching a major U.S. tax-cutting and spending bill working its way through the Senate. The Congressional Budget Office has estimated the legislation could add $3.3 trillion to the national debt over the next decade, raising concerns about the long-term demand for U.S. Treasuries.
MSCI’s gauge of stocks across the globe rose 0.10% to 915.73, on track for a third straight session of gains after hitting an intraday record of 916.44. In Europe, the pan-European STOXX 600 index fell 0.29% but was still set to mark its second consecutive quarterly advance despite a decline of more than 1% in June.
The U.S. dollar index, which measures the greenback against a basket of major currencies, fell 0.14% to 97.06. The euro strengthened 0.24% to $1.1747. The dollar has weakened 10.5% so far this year, marking its steepest first-half drop since 1973, when the United States adopted a free-floating exchange rate regime.
The yield on benchmark 10-year U.S. Treasury notes slipped 0.8 basis points to 4.275%. In commodities, U.S. crude fell 0.96% to $64.89 a barrel, while Brent crude dropped 0.32% to $67.55.
