S&P 500 rises to another record to wrap up second-quarter comeback
The S&P 500 gained 0.52% and posted another record close, ending at 6,204.95. The Nasdaq Composite advanced 0.47% and also reached fresh all-time highs, closing at 20,369.73. The Dow Jones Industrial Average climbed 275.50 points, or 0.63%, settling at 44,094.77.
Monday's rise follows Canada rescinding its digital service tax in an effort to facilitate trade negotiations with the U.S. That's after President Donald Trump on Friday said the U.S. was ' terminating ALL discussions on Trade with Canada.' Initial payments on the tax were set to begin Monday and would have applied to companies such as Google, Meta and Amazon.
Investors are awaiting the announcement of any trade deals between the U.S. and its trading partners, as Trump's 90-day tariff reprieve is set to expire next week. On Monday, Treasury Secretary Scott Bessent said there are ' countries that are negotiating in good faith.' However, he added that 'if we can't get across the line because they are being recalcitrant,' tariffs could still 'spring back' to the levels announced on April 2.
Deals on that front could be finalized once Trump's ' one, big, beautiful' bill passes, National Economic Council Director Kevin Hassett said on CNBC's ' Squawk on the Street ' Monday. The package narrowly passed a key procedural vote in the Senate on Saturday night. If passed by the Senate, it faces an uncertain path in the House, where some GOP lawmakers have balked at revisions in the latest version of the bill.
While the looming tariff deadline and tax bill could help spur volatility in the remainder of 2025, equity fundamentals and improving market breadth, among other factors, could mean that the recent momentum will continue, according to Terry Sandven of U.S. Bank Wealth Management.
'The wall of worry is crumbling as stocks reach all-time highs,' said the chief equity strategist, whose year-end target of 6,325 implies nearly 2% upside in the S&P 500 from Monday's close. 'Inflation is stable, interest rates are range-bound and earnings are trending higher. That's a favorable backdrop for stocks to continue to forge higher as we begin the second half.'
Monday marked the last day of June, a month in which the major averages have staged a sharp recovery back to record levels. The S&P 500 rose nearly 5% in the month, while the tech-heavy Nasdaq jumped more than 6%. The Dow added more than 4% in June.
Prior to the S&P 500 and Nasdaq hitting all-time highs Friday, global trade and tariff tensions rocked the market, putting the broad market index within striking distance of a bear market in early April.
All three major averages finished the second quarter with solid gains, with the S&P 500 adding more than 10%, the Nasdaq rising nearly 18% and the Dow popping almost 5%.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
4 minutes ago
- Telegraph
Trans swimmer Lia Thomas stripped of medals after Trump crackdown
A transgender swimmer's medals are to be stripped, the University of Pennsylvania has agreed. The university will also have to issue formal apologies to every biological female competitor who lost out to a biological male, marking the end to a landmark legal battle. The US Department of Education's Office for Civil Rights (OCR) found UPenn violated Title IX by 'allowing a male to compete in female athletic programs and occupy female-only intimate facilities'. The case focused on Lia Thomas, who last competed for the Ivy League school in Philadelphia in 2022, as the first transgender winner of an American collegiate title. The move comes as part of the Trump administration's broader attempt to remove transgender athletes from girls' and women's sports. Under the agreement, UPenn agreed to restore all individual Division I swimming records and titles to female athletes who lost out to Thomas, the Education Department said. The University of Pennsylvania also agreed to send a personalised apology letter to each of those swimmers. 'The department commends UPenn for rectifying its past harms against women and girls, and we will continue to fight relentlessly to restore Title IX's proper application and enforce it to the fullest extent of the law,' Linda McMahon, the education secretary, said. The Education Department opened its investigation in February and concluded in April that Penn had violated Title IX, a 1972 law forbidding sex discrimination in education. Such findings have almost always been resolved through voluntary agreements. If Penn had fought the finding, the department could have moved to refer the case to the Justice Department or pursued a separate process to cut the school's federal funding.
Reuters
5 minutes ago
- Reuters
Corona beer maker Constellation Brands misses quarterly estimates amid tariff woes
July 1 (Reuters) - Constellation Brands (STZ.N), opens new tab missed first-quarter sales and profit estimates on Tuesday, as fears of rising tariffs and economic uncertainty prompted consumers to reduce purchases of beers and wines. U.S. alcoholic beverage makers have faced a double blow from the Trump administration's shifting trade policies, a challenge that comes at a time when the industry is already grappling with tepid demand. Corona beer maker reported net sales of $2.52 billion for the quarter ended May 31, compared with analysts' average estimate of $2.55 billion, according to data compiled by LSEG. Tariffs on beer imports, along with the inclusion of beer cans under aluminum tariffs, have impacted liquor makers such as Constellation Brands and Molson Coors (TAP.N), opens new tab. Last month, U.S. President Trump announced plans to double tariffs on imported steel and aluminum to 50% from 25%, intensifying pressure on global steel producers and escalating the trade war. Meanwhile, Constellation Brands has experienced a significant slowdown in beer consumption, particularly among its Hispanic consumers, following Trump's immigration crackdown. The company's beer business, its largest revenue contributor, reported a 2.6% decline in quarterly depletion volume — the rate at which products are sold — driven by declines in brands such as Modelo Especial and Corona Extra. Its beer depletions rose 6.4% a year ago. Sequential price increases and cost management measures were offset by higher expenses, including increased costs from aluminum tariffs and marketing expenditures. The company's quarterly operating margins at its beer business fell 150 basis points to 39.1%. Constellation reported comparable profit of $3.22 per share for the quarter, below estimates of $3.31. Shares of the company, which maintained its annual enterprise organic sales and profit forecast, were marginally lower in extended trading.
Reuters
5 minutes ago
- Reuters
Foreign investors increase dollar hedges on US stock portfolios
NEW YORK, July 1 (Reuters) - Overseas asset managers and pensions are adding protection against a weakening dollar, concerned about the U.S. currency's diminishing ability to diversify their U.S. equity portfolios. Because such stock funds carry built-in dollar exposure, investors with other home currencies that had not neutralized the foreign exchange risk were cushioned when the dollar was strong if Wall Street performed badly. But the dollar's correlation with other U.S. assets, and the impact of its fall on portfolio performance, came into sharper focus when the Trump administration announced far-reaching global tariffs on April 2, sending U.S. stock indexes and the greenback sharply lower. The dollar (.DXY), opens new tab hit a three-year low against a basket of currencies, raising risks for investors whose portfolios once benefited from the natural hedge. Now, managers are reducing dollar exposures and increasing the hedge ratios for U.S. stock portfolios where clients' investment policies allow them to do so. About 10% of Russell Investments pension fund clients in Europe and the UK have already increased hedge ratios on their international stock portfolios, said Van Luu, global head of solutions strategy for fixed income and foreign exchange for Russell in London. One client raised it to 75% from 50%, highlighting the desire to have a greater portion of U.S. stocks protected against the weakening dollar. "If what we're seeing persists... then you will have more clients taking action in that direction," said Luu. The dollar is down 10% for the year, and 6.5% since U.S. President Donald Trump's so-called Liberation Day in April. Meanwhile, the S&P 500, the benchmark U.S. stock index (.SPX), opens new tab, has recovered 24% since an April slump and is up 5.3% this year, flirting with record highs. The MSCI gauge of global stocks, minus the U.S., (.dMIWU00000PUS), opens new tab has risen 16% for the year. "It's not enough to look at the stock market and say it is more or less back to where it was, so nothing happened," said Peter Vassallo, FX portfolio manager at BNP Paribas Asset Management, who manages currency exposures across its asset classes. BNP has been reducing dollar exposures for its clients that include pension funds, sovereign wealth funds and central banks. It has sold U.S. dollars across stock and fixed income portfolios, and built up what Vassallo described as a sizable position in options for funds that allow these strategies. He said the euro, yen and the Australian dollar are among the primary currencies it bought against the dollar, a big contrast to how the asset manager ended the previous year with a small "overweight" in the U.S. dollar. "This switch towards a more uncertain policy regime created an environment where we as market participants see the U.S. as more hostile to international capital flows, international trading," Vassallo said. After a June review, Justin Onuekwusi, chief investment officer at St. James's Place, said it is maintaining a strategic hedge that allows it to reduce overseas currency exposure in favor of the pound by up to 20%. The strategy "has been beneficial for our clients' returns year to date," he said. Onuekwusi said he now sees the dollar as closer to its longer-term fair value and has marginally reduced dollar hedging across managed portfolios. Foreign investors hold more than $30 trillion in U.S. securities, about $17 trillion of which is in equities and more than $12 trillion in long-term debt, according to data published in April, opens new tab by the U.S. Treasury Department. Marcus Fernandes, global head of currency management at Northern Trust, said the divergence in the correlation of risk is more than in the past. "That's why people are thinking faster than before, 'I need to increase my hedge ratio'," he said. "Once those conversations start, they usually end with increased hedge ratios," he said. Data from Russell showed that a euro-hedged version of the MSCI USA index was flat for the year through May, while the euro-unhedged version was down 8.3%, showing the benefit of hedging for euro-based investors. The dollar is down 13% against the euro on concerns about flip-flopping U.S. trade policies and growth. "FX is back on the boardroom agenda," said Joe McKenna, head of fund solutions at MillTech, a London-based FX and cash management company. "What was once handled quietly in the back office is now drawing the attention of CIOs and CFOs, driven by renewed dollar volatility." Managers hedge currency exposure by selling the dollar against their respective base currency like the euro or the pound in the FX forwards market, and also use derivatives like options. When the dollar weakens, the hedge position gains in value while the dollar exposure on the underlying stock portfolio loses. Forward selling of the dollar is the largest in four years, according to John Velis, Americas macro strategist at BNY Markets, suggesting investors are unwilling to carry long dollar exposures, even with the potential for it to rally if U.S. tariff policy changes or the Israel-Iran conflict resumes. Investors reallocating to U.S. assets to meet benchmark weights after April's selloff are now hedging those exposures, he told Reuters. "It communicates that dollar volatility is a concern," said Velis. "It can be policy volatility as well as macroeconomic volatility that's causing people to... not keep that dollar exposure because of the fears of the dollar decline."
