US Stocks Rally on Trade Progress and Tax Bill Momentum
US stocks ended the quarter on a high note, with the S&P 500 and Nasdaq reaching fresh record highs, driven by renewed trade optimism and hopes for progress on a sweeping tax reform bill. Investors cheered Canada’s decision to rescind its digital services tax and signs of cooperation on the U.S. tax bill, fueling the market’s strongest quarterly performance in over a year.
S&P 500 and Nasdaq Close at Record Highs
The S&P 500 climbed 0.52%, or 31.88 points, to 6,204.95, while the Nasdaq rose 0.48%, or 96.28 points, to 20,369.73 — both notching new record highs. The Dow Jones Industrial Average advanced 0.63%, or 275.50 points, to finish at 44,094.77. For the quarter, the S&P 500 surged over 10%, the Nasdaq gained more than 17%, and the Dow climbed 4.5%, marking their best performance in over a year.
The 10-year Treasury yield slipped to 4.242%, suggesting investor confidence in equities despite ongoing legislative uncertainty.
Trade Breakthrough Reverses Earlier Market Jitters
Investor sentiment was initially rattled when President Donald Trump abruptly terminated trade talks with Canada due to its implementation of a digital services tax. However, over the weekend, Canada withdrew the tax to restart trade negotiations, boosting market confidence.
U.S. and Canadian officials aim to finalize a trade deal by July 21, while White House economic advisor Kevin Hassett expressed optimism that other nations would follow Canada’s lead in removing similar digital taxes.
This positive development follows earlier progress with China, where officials agreed to approve rare earth export applications. The U.S. heavily relies on China’s supply of rare earth magnets, and companies like Ford Motor have recently faced production disruptions due to shortages.
Tax Bill Voting in Focus
Another key driver of the rally is the market’s optimism about the progress of the “One Big Beautiful Bill” — a massive tax reform package currently being debated in Congress. The Senate is actively voting on amendments to get the bill passed by July 4, although its fate remains uncertain due to divisions within the Republican Party.
Still, investors are hopeful that tax cuts and corporate incentives included in the bill will stimulate economic growth and earnings, giving further support to equity markets.
Corporate Highlights Boost Investor Confidence
Several corporate developments added fuel to the bullish sentiment:
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Moderna shares rose 1.58% after reporting strong results from a late-stage flu vaccine trial.
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Hewlett Packard Enterprise soared 11.08% and Juniper Networks climbed 8.45% after the DOJ cleared HPE’s $14 billion acquisition of Juniper.
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GMS surged 11.73% following a $4.3 billion acquisition deal by Home Depot.
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Meta (Facebook parent) reached a new high, up 0.61%, as it expanded AI hiring.
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Oracle jumped 4% after revealing a $30 billion cloud deal starting in fiscal 2028.
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Joby Aviation rose 11.64% after delivering its first flying taxi to the UAE.
Cryptocurrency Market Update
Robinhood shares touched a 52-week high as the trading platform announced new cryptocurrency tools aimed at becoming a centralized hub for digital assets.
Meanwhile, Bitcoin dipped 0.69%, trading at $107,634.70, highlighting the ongoing volatility in the crypto market despite broader tech and equities gains.
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