TRADING DAY Wall Street's twin peaks
ORLANDO, Florida, June 27 (Reuters) - - TRADING DAY
Making sense of the forces driving global markets
By Jamie McGeever, Markets Columnist
I'd love to hear from you, so please reach out to me with comments at jamie.mcgeever@thomsonreuters.com, opens new tab. You can also follow me at @ReutersJamie and @reutersjamie.bsky.social.
Just a heads up, Trading Day will be in the capable hands of Lewis Krauskopf next week and Alden Bentley the following week, while I take some time off to recharge the batteries. Back on July 13.
Another extraordinary week ended on Friday with the S&P 500 and Nasdaq hitting all-time highs as investors ramped up bets that U.S. interest rates will soon fall, a stunning turnaround from the post-'Liberation Day' tariff gloom of early April.
Several developments this week fed into the rate cut narrative - the Iran-Israel ceasefire, tumbling oil prices, soft U.S. economic data, dovish comments from some Fed officials, and renewed pressure from President Donald Trump on the Fed to ease.
Fed Chair Jerome Powell pushed back against suggestions rates could be cut as soon as July, arguing that the impact of tariffs should be assessed first, and the consensus among the Fed's 19 rate-setters is to hold the line too. But traders are now leaning towards three quarter-point rate cuts this year.
Progress on trade is also boosting investor sentiment. Trump said a deal between the US and China had been signed, but did not provide details, and Treasury Secretary Scott Bessent said the two countries have resolved issues surrounding shipments of rare earth minerals and magnets to the US.
That said, trade optimism was dented on Friday after Trump abruptly cut off trade talks with Canada over its new tax on U.S. technology firms, calling it a "blatant attack" and saying he will set a new tariff rate on Canadian goods next week.
The most significant market move of the week, however, was not in equities but in currencies. The dollar continued its decline, and is now down more than 10% this year. That's its worst first-half performance of any year in more than 50 years.
It should be remembered, however, that the dollar started the year at extremely expensive levels, so some adjustment was always likely. This is proving to be a pretty severe adjustment, one which markets and policymakers appear to be relaxed about. For now.
This Week's Key Market Moves
Chart of the Week
Self-explanatory really.
When the world's reserve currency has its steepest January-June decline since the era of free-floating exchange rates began over half a century ago, something major is underway. How big remains to be seen. But if the Trump administration wanted a weaker currency, it can't complain.
Here are some of the best things I read this week:
What could move markets on Monday?
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias.
Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
16 minutes ago
- Reuters
Arizona governor signs $500K bill for upgrades to Chase Field
June 28 - The Arizona Diamondbacks' home venue, Chase Field, will be upgraded after Arizona Gov. Katie Hobbs signed a bill Friday earmarking $500 million toward renovations. The measure will direct sales tax collected at the Phoenix stadium and nearby buildings, plus taxes from some club employees, to be used for the facility improvements. The Diamondbacks have also pledged $250 million to the project. Hobbs signed the bill in a ceremony attended by Diamondbacks players Corbin Burnes and Corbin Carroll. The governor tweeted, "I'm not going to let Arizona lose the Diamondbacks. Today, I signed a bipartisan deal to keep the @Dbacks in downtown Phoenix -- creating good-paying jobs and making sure families can enjoy baseball for generations. Let's play ball!" Diamondbacks CEO Derrick Hall told Phoenix's 12News, "We weren't sure what Plan B was going to be if we couldn't fund this building in a renovation. I'm grateful to (Hobbs). She's a supporter. She's a baseball fan, a Diamondbacks fan, and I'm a fan of hers." Diamondbacks manager Torey Lovullo said of the news, "This is an unbelievable measure. This was something that was passed and has been in the works for a long time. ... I'm grateful for everybody making the sacrifice and saying, 'Let's keep the Arizona Diamondbacks in Arizona where they belong.'" Upgrades will be made to Chase Field's retractable roof and to the venue's air conditioning in addition to other infrastructure areas. Attendance is up in Phoenix this year, two seasons after the Diamondbacks won the National League championship before falling to the Texas Rangers in the World Series. Arizona lost another major sports team last year when the NHL's Coyotes moved to Salt Lake City and were renamed the Utah Hockey Club and subsequently the Utah Mammoth. --Field Level Media
Times
an hour ago
- Times
US markets hit new heights despite Canada trade talks blow
Wall Street staged an end-of-week rally with American indices closing at new highs, boosted by the ceasefire in the Middle East and a renewed appetite for shares in artificial intelligence companies. It was a close run thing, however. While the S&P 500 and Nasdaq had comfortably risen above previous records, the gains were pared or even erased after President Trump said he was calling off trade negotiations with Canada, citing its digital services tax and adding that he would set their tariff rate within a week. At the close of official trading in New York on Friday night, the S&P 500 had its first record since February with a rise of 0.5 per cent to 6,173.07 and a weekly increase of 3.4 per cent. Nvidia, the chip designer, led the charge back into AI stocks with a rise of 1.7 per cent to $157.75, a third successive record close and increasing its stock market valuation to $3.9 trillion, ahead of Microsoft's $3.7 trillion. The AI effect was also enough to take the technology-heavy Nasdaq Composite to its first record close since December with a rise of 0.5 per cent to 20,273.46, up 4.3 per cent over the five days. The upbeat market mood was in contrast to the start of the week after the US bombing raid on Iran's nuclear facilities and the exchanges of missiles between Israel and Iran, which sent the price of Brent crude, the international benchmark, closer to $80 a barrel. The oil price had its steepest weekly decline since March 2023. In New York it was trading 4 cents a barrel higher on the day at $67.77, down 12 per cent on the week. Gold lost some of its recent shine, down 1.8 per cent on the day at $3,273.70 an ounce, after Trump said on Thursday night that the US had signed a trade deal with China. On the currency markets, after a brief bout of buying early in the week, the dollar continued to lose favour with traders, leaving the pound close to the near four-year high it reached on Thursday, though a mid-afternoon sell-off left it 0.25 per cent down at $1.3691.
The Herald Scotland
an hour ago
- The Herald Scotland
Trump ends trade talks with Canada, says US could move other deadlines
"Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately," Trump said. "We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period." More: Trump praises Amy Coney Barrett, rips NYC mayoral candidate Mamdani: Recap The announcement came after a White House press conference where Trump presented an ambiguous timeline for reciprocal tariffs he put on most other nations to go into effect. Trump introduced the tariffs in April and then paused them. If no further action is taken, they will go into effect on July 9. Trump's administration was separately working on deals with Canada, Mexico and China. At the June 27 news conference, Trump said his administration would soon send out letters to U.S. trading partners informing them of their tariff rate. "We talked to many other countries and we're just going to tell them what they have to pay to do business in United States," he told reporters. "Maybe before, we're going to send out a letter." Trump also signaled later that countries could be facing an even shorter timeline. "We can do whatever we want. We could extend it. We could make it shorter. I would like to make it shorter. I'd like to just send out letters to everybody," Trump said in the previously-unscheduled White House news conference. The president also lashed out at economists who predicted his administration's tariffs could cause a recession. He said they should "go back to business school," while defending his second-term levies. "We're taking in billions and billions of dollars from China and a lot of other countries," Trump added. Trump unveiled a slew of tariffs that roiled economic markets, but paused many of them as he negotiates trade deals and later lowered steep tariffs on China. Markets have since recovered. Stocks rose on June 27, after the administration said it had solidified an agreement with Beijing, then fell after his social media post on Canada. More: Trade deals and better vibes lift S&P 500, Nasdaq to record highs. Dow jumps, too. Commerce Secretary Howard Lutnick boosted investor confidence when he said on June 26 that a framework agreement between the U.S. and Canada had been finalized and the administration was close to reaching deals with 10 nations. His comments came after Trump said at an East Room event "we just signed with China yesterday." The White House later clarified that he was referring to an adjustment to an earlier framework that would expedite shipments of rare earth materials to the United States. Trump counted China on June 27 in a tally of countries he said he'd made deals with, including the United Kingdom. The president also predicted a deal would come about soon with India. The latest round of negotiations between the European Union and the United States wrapped up not long before Trump addressed reporters. EU commissioner for Trade and Economic Security Maros Sefcovic said in a social media post that he'd just spoken to U.S. Trade Representative Jamieson Greer. Trump threatened in May to put a 50% tariff on the EU before returning to the July 9 deadline. Contributing: Zac Anderson
