North American stock markets rise on trade talk hopes
At 11:09 a.m. ET, the S&P/TSX composite index was up 36.72 points, or 0.14 per cent, at 26,729.18, set to log its fourth straight quarter in green.
President Donald Trump had called off the trade talks on Friday over Canada's digital services tax targeting U.S. technology firms, calling it a 'blatant attack.'
Canada late on Sunday scrapped the tax, hours before it was set to take effect, in a bid to restart the negotiations.
Prime Minister Mark Carney and Trump will resume trade negotiations to agree to a deal by July 21, the Canadian finance ministry said.
'The biggest challenge for the market is to understand how quickly things will whipsaw and maybe not react quite as strongly to each individual step because we still haven't negotiated a trade agreement and there still could be some more challenges there,' Verecan Capital Management CEO Colin White said.
With Trump's July tariff deadline looming, investors will monitor signs of progress on the trade front.
Healthcare stocks led gains on the TSX, rising 2 per cent. Bausch Health and Sienna Senior were up 4.4 per cent and 1.2 per cent, respectively.
Communication stocks gained 0.9%.
On the flip side, energy stocks led sectoral losses, dropping 0.6 per cent as oil prices steadied with Middle East risks easing and markets weighing on a possible OPEC+ output increase in August.
Baytex Energy lost 1.8 per cent, International Petroleum was down 1.7 per cent.
In individual stocks, MDA Space rose 3.2 per cent after the space firm announced a contract extension with the Canadian government providing continuous space-based maritime awareness and security.
U.S. stocks are adding to their records on Monday as Wall Street nears the finish of a second straight winning month.
The S&P 500 was 0.2 per cent higher in its first trading after completing a stunning rebound from its springtime sell-off of roughly 20 per cent. The Dow Jones Industrial Average was up 146 points, or 0.3 per cent, and the Nasdaq composite was 0.2% higher.
Stocks got a boost after Canada said it's rescinding a planned tax on U.S. technology firms and resuming talks on trade with the United States. On Friday, Mr. Trump had said he was suspending talks with Canada because of his anger with the tax, which he called 'a direct and blatant attack on our country.'
One of the main reasons U.S. stocks came back so quickly from their springtime swoon has been hope that Trump will reach deals with other countries to lower his stiff proposed tariffs. Otherwise, the fear is that trade wars could stifle the economy and send inflation higher.
Many of Mr. Trump's announced tariffs are currently on pause, and they're scheduled to kick back into effect in a little more than a week.
In an interview with Fox News Channel's 'Sunday Morning Futures,' Mr. Trump said his administration will notify countries that the trade penalties will take effect unless there are deals with the United States. Letters will start going out 'pretty soon' before the approaching deadline, he said.
The U.S. stock market being back at a record high could actually raise the risk of renewed escalations on tariffs, according to strategists at Deutsche Bank led by Parag Thatte and Binky Chadha. They point to the pattern in 2018 and 2019 of rallies for the market prompting escalations for tariffs, which then drove market pullbacks followed by relents on tariffs that then sparked rallies again.
'Despite the rhetoric to the contrary, this dynamic looks alive and well,' the strategists wrote in a report. 'In our view, beyond the market reaction, if negative impacts of tariffs on growth, earnings or inflation start to materialize, we will get further relents.'
On Wall Street, GMS' stock jumped 11.8 per cent after the supplier of specialty building products said it agreed to sell itself to a Home Depot subsidiary in a deal that would pay US$110.00 per share in cash. That would give it a total value of roughly US$5.5-billion, including debt.
Less than two weeks ago, another company, QXO, said it was offering to buy GMS for US$95.20 per share in cash. After the announcement of the Home Depot bid, QXO's stock rose 1.9 per cent, and Home Depot's stock slipped 0.5 per cent.
Hewlett Packard Enterprise rallied 13.1 per cent and Juniper Networks climbed 8.4 per cent after saying they had reached an agreement with the U.S. Department of Justice that could clear the way for their merger go through, subject to court approval. HPE is trying to buy Juniper in a US$14-billion deal.
In the bond market, Treasury yields eased a bit ahead of major economic reports later in the week. The highlight will be Thursday's jobs report. It's often the most anticipated economic data of each month, and it will come a day earlier than usual because of the Fourth of July holiday.
The job market has remained relatively steady recently, even in the face of tariffs, but hiring has slowed. Economists expect Thursday's data to show another slowdown in overall hiring, down to 115,000 jobs in June from 139,000 in May.
Such data has kept the Federal Reserve on hold this year when it comes to interest rates. Fed Chair Jerome Powell has said repeatedly that it's waiting for more data to show how tariffs will affect the economy and inflation before resuming its cuts to interest rates. That's because lower rates can fan inflation higher, along with giving the economy a boost.
Mr. Trump, meanwhile, has been pushing for more cuts to rates and for them to happen soon. Two of his appointees to the Fed have said recently they could consider cutting rates as soon as the Fed's next meeting in less than a month.
The yield on the 10-year Treasury slipped to 4.27 per cent from 4.29 per cent late Friday.
In stock markets abroad, indexes dipped modestly in Europe following a more mixed finish in Asia.
Stocks fell 0.9 per cent in Hong Kong but rose 0.6 per cent in Shanghai after China reported its factory activity improved slightly in June after Beijing and Washington agreed in May to postpone imposing higher tariffs on each others' exports, though manufacturing remained in contraction.
Reuters and The Associated Pres
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBC
18 minutes ago
- CBC
WATCH — Struggling to find a job this summer? You aren't alone
Some students are struggling to find work without experience As the school bell rings for the last time this year, you might want to hear ka-ching instead. We're talking about summer jobs and how you stay busy and earn money during time off. CBC Kids News took to the streets of Toronto, Ontario, to ask kids and teens how the summer job hunt is going. Good, bad and ugly — we heard it all. If you're struggling to find work this summer, you aren't the only one. Statistics Canada says that youth (people aged 15 to 24) are facing the highest unemployment rate since the 1990s, if you exclude the pandemic. On June 6, the federal government announced the creation of 6,000 more new job opportunities for students this summer to help fill the void. How are you finding the summer job hunt? Click play to hear how the summer job hunt is going for these kids and then answer our poll below. ⬇️⬇️⬇️ Want to hear from more Canadian kids and teens? Check out these streeter videos: Have more questions? Want to tell us how we're doing? Use the 'send us feedback' link below. ⬇️⬇️⬇️
Globe and Mail
19 minutes ago
- Globe and Mail
Starmer faces down a revolt over UK welfare reform after a troubled first year in office
LONDON (AP) — U.K. Prime Minister Keir Starmer marks a year in office this week, fighting a rebellion from his own party in a vote Tuesday on welfare reform and reckoning with a sluggish economy and rock-bottom approval ratings. It's a long way from the landslide election victory he won on July 4, 2024, when Starmer's center-left Labour Party took 412 of the 650 seats in the House of Commons to end 14 years of Conservative government. In the past 12 months, Starmer has navigated the rapids of a turbulent world, winning praise for rallying international support for Ukraine and persuading U.S. President Donald Trump to sign a trade deal easing tariffs on U.K. goods. But at home his agenda is on the rocks, as he struggles to convince British voters — and his own party — that his government is delivering the change that it promised. Inflation remains stubbornly high and economic growth low, frustrating efforts to ease the cost of living. Starmer's personal approval ratings are approaching those of Conservative Prime Minister Liz Truss, who lasted just 49 days in office in 2022 after her tax-cutting budget roiled the economy. John Curtice, a political scientist at the University of Strathclyde, said that Starmer has had 'the worst start for any newly elected prime minister.' Rebellion over welfare reform On Tuesday, Starmer faces a vote in Parliament on welfare spending after watering down planned cuts to disability benefits that caused consternation from Labour lawmakers. Many balked at plans to raise the threshold for the payments by requiring a more severe physical or mental disability, a move the Institute for Fiscal Studies think tank estimated would cut the income of 3.2 million people by 2030. After more than 120 Labour lawmakers said they would vote against the bill — more than enough to defeat it — the government offered concessions, including a guarantee that no one currently getting benefits will be affected by the change. 'We have listened to the concerns that have been raised to help us get these changes right," Work and Pensions Secretary Liz Kendall said as she opened the debate on the bill in the House of Commons. But while some rebels backed down, others maintained their opposition, forcing the government to offer a further concession hours before the Tuesday evening vote. Ministers pledged that changes to benefits would not be made until after a review, carried out with the help of disability groups. That came after a string of Labour lawmakers spoke against the bill in Parliament. One, Rachel Maskell, called the cuts 'Dickensian.' 'They are far from what this Labour Party is for: a party to protect the poor,' she said. The welfare U-turn is the third time in a few weeks that the government has reversed course on a policy under pressure. In May, it dropped a plan to end winter home heating subsidies for millions of retirees. In June, Starmer announced a national inquiry into organized child sexual abuse, something he was pressured to do by opposition politicians — and Elon Musk. 'It's a failure of leadership for a prime minister with such a big majority to not be able to get their agenda through,' said Rob Ford, professor of politics at the University of Manchester. 'I can't think of many examples of a prime minister in postwar politics suffering such a big setback when presiding over such a strong position in the Commons.' The U-turns also make it harder for the government to find money to invest in public services without raising taxes. The government estimated that its welfare reforms would save 5 billion pounds ($7 billion) a year from a welfare bill that has ballooned since the COVID-19 pandemic. After the concessions, it's only likely to save about half that amount. Starmer acknowledges errors The government argues that it has achieved much in its first year: It has raised the minimum wage, strengthened workers' rights, launched new social housing projects and pumped money into the state-funded health system. But it has also raised taxes for employers and farmers, as well as squeezing benefits, blaming previous Conservative governments for the need to make tough choices. That downbeat argument has done little to make Starmer popular. In recent days, Starmer has acknowledged mistakes. He told The Sunday Times that he was 'heavily focused on what was happening with NATO and the Middle East,' while the welfare rebellion was brewing at home, and should have acted sooner to win over colleagues. UK politics in flux Starmer's struggles are all the more striking, because the opposition Conservative Party had its worst-ever election result in 2024, reduced to only 121 lawmakers. But U.K. politics is in unpredictable flux. A big chunk of Conservative support — and some of Labour's — shifted in this spring's local elections to Reform U.K., a hard-right party led by veteran political pressure-cooker Nigel Farage. Reform has just five legislators in the House of Commons, but regularly comes out on top in opinion polls. If the shift continues, it could end a century of dominance by the two big parties. Starmer's key asset at the moment is time. He doesn't have to call an election until 2029. 'There's still plenty of time to turn things around,' Ford said. But he said that the Labour lawmakers' rebellion 'will make things harder going forward, because it's not like this is the end of difficult decisions that he's going to have to make. 'Barring some magical unexpected economic boom … there's going to be a hell of a lot more fights to come,' he said.
CBC
23 minutes ago
- CBC
U.S. Senate passes Trump's 'Big Beautiful Bill,' sends to House for final approval
Social Sharing The Republican-controlled U.S. Senate passed President Donald Trump's tax and spending bill on Tuesday, signing off on a massive package that would enshrine many of his top priorities into law while adding $3.3 trillion US to the national debt. The bill now heads back to the House of Representatives for final approval. Trump has pushed lawmakers to get it to his desk to sign into law by the July 4 Independence Day holiday. Trump's Republicans have had to navigate a narrow path while shepherding the 940-page bill through a Congress that they control by the slimmest of margins. With Democrats lined up in opposition, Republicans have had only three votes to spare in both the House and Senate as they wrangled over specific tax breaks and health-care policies that could reshape entire industries and leave millions of people uninsured. Yet they have managed to stay largely unified so far. Only three of the Senate's 53 Republicans joined with Democrats to vote against the package, which passed 51-50 after Vice-President JD Vance cast the tiebreaking vote. The vote in the House, where Republicans hold a 220-212 majority, is likely to be close as well. 'Not fiscal responsibility' An initial version passed with only two votes to spare in May, and several Republicans in that chamber have said they do not support the version that has emerged from the Senate, which the non-partisan Congressional Budget Office (CBO) estimates will add $800 billion US more to the national debt than the House version. The House Freedom Caucus, a group of hardline conservatives who repeatedly threatened to withhold their support for the tax bill, is pushing for more spending cuts than what the Senate offered. "The Senate's version adds $651 billion to the deficit — and that's before interest costs, which nearly double the total," the caucus posted online on Monday, "That's not fiscal responsibility. It's not what we agreed to." A group of more moderate House Republicans, especially those who represent lower-income areas, object to the steeper Medicaid cuts in the Senate's plan. WATCH | Legislation will go back to the House for a final round of votes: Trump's 'Big Beautiful Bill' advances to next Senate phase, but fate remains in question 2 days ago Duration 5:07 Senate Republicans voting in a Saturday session narrowly cleared a key procedural step as they race to advance U.S. President Donald Trump's One Big Beautiful Bill Act — a package of tax breaks, spending cuts and bolstered deportation funds. The 940-page bill was released shortly before midnight. If the Senate is able to pass it, the legislation will go back to the House for a final round of votes before it could reach the White House. "I will not support a final bill that eliminates vital funding streams our hospitals rely on," Rep. David Valadao, a California Republican, said during the weekend debate. Still, House Republicans are likely to face enormous pressure to fall in line from Trump in the days to come. Tax breaks, immigration crackdown, tighter benefits The One Big Beautiful Bill Act would make permanent Trump's 2017 business and personal income tax cuts, which are due to expire at the end of this year, and dole out new tax breaks for tipped income, overtime and seniors that he promised during the 2024 election. It provides tens of billions of dollars for Trump's immigration crackdown and would repeal many of Democratic president Joe Biden's green-energy incentives. The bill would also tighten eligibility for food and health safety net programs, which non-partisan analysts say would effectively reduce income for poorer Americans who would have to pay for more of those costs. The CBO estimates the latest version of the bill would add $3.3 trillion US to the $36.2 trillion debt pile. That increased debt effectively serves as a wealth transfer from younger to older Americans, non-partisan analysts say, as it will slow economic growth, raise borrowing costs and crowd out other government spending in the decades to come. The bill also would raise the nation's borrowing limit by $5 trillion US, postponing the prospect of a debt default this summer that would roil global markets. WATCH | How Trump's 'Big Beautiful Bill' could affect Canadians' wallets: What Trump's 'Big Beautiful Bill' means for Canadians' wallets 1 month ago Duration 4:49 Republicans rejected the cost estimate generated by the CBO's long-standing methodology. Nonetheless, foreign bond investors see incentives to diversify out of U.S. Treasuries as deficits deepen. Republicans say the bill will help families and small businesses and put benefit programs like Medicaid on a more sustainable path, and they have broadly agreed on its main contours. But they have struggled to agree on the Medicaid funding mechanism and a tax break for state and local tax payments that is a top priority for a handful of House Republicans from high-tax states including New York, New Jersey and California. Others worry that a crackdown on a funding mechanism for the Medicaid health program could lead to service cutbacks in rural areas. Some on the party's right flank, meanwhile, have pushed for deeper Medicare cuts to lessen its budgetary impact. Trump has singled out those Republican dissenters on his Truth Social network and excluded them from White House events, and few have been willing to defy him since he returned to office in January. Sen. Thom Tillis of North Carolina, one of the three Republicans who voted against the bill, said on Sunday he would not run for re-election next year.
