Stock market today: Dow, S&P 500 and Nasdaq futures rise as trade deal hopes lift stocks toward more records

US equities advanced on Monday, with the Dow, S&P 500, and Nasdaq gaining 0.5%, 0.3%, and 0.4% respectively, as market sentiment improved on signs of progress in trade negotiations and ongoing Senate discussions for President Trump's $4.5 trillion tax cut bill. This momentum, underscored by Canada's decision to scrap its digital services tax and a new UK tariff accord, is driving major indexes towards or to new record highs, easing concerns over trade tensions and setting a positive tone for a holiday-shortened week ahead of the June jobs report and potential Fed rate cuts.

Analysis

US equity markets are advancing, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite gaining approximately 0.5%, 0.3%, and 0.4% respectively. This rally has propelled the S&P 500 and Nasdaq to new record highs for the first time since February, signaling a shift in momentum after a volatile first half of the year. The primary catalyst is an easing of trade tensions, evidenced by Canada's decision to scrap its digital services tax targeting US tech firms and a new tariff accord with the UK going into effect. Furthermore, President Trump's statement that he may not need to extend the July 9 tariff deadline has bolstered market sentiment. Concurrently, investors are focused on fiscal policy as the Senate negotiates a proposed $4.5 trillion tax cut bill, although its potential to add $3.3 trillion to the deficit over a decade, according to the CBO, remains a key consideration. Near-term focus will be on the June jobs report this Thursday and growing expectations for a Federal Reserve interest rate cut, though trading volumes may be lighter in a holiday-shortened week.

Key Decisions for Investors

• Given the breakout to new highs fueled by positive trade developments, such as Canada's removal of its digital tax, investors may consider maintaining or increasing exposure to broad market indices and the technology sector.
• Investors must closely track the Senate negotiations on the $4.5 trillion tax bill and the upcoming June jobs report, as these events are critical catalysts that could either sustain or reverse the current market rally.
• While sentiment is positive, investors should acknowledge that the trade resolutions are described as 'accords' not 'agreements' and the tax bill faces deficit concerns, warranting vigilance for any signs of political or economic headwinds, especially during a low-liquidity holiday week.