Trade negotiations with Canada stopped, Trump says
President Donald Trump says he’s stopped negotiating trade deals with Canada for now.
U.S. stocks ended strong, with the broad S&P 500 and tech-laden Nasdaq scoring fresh record highs and closing out their best three months in more than a year.
Investors were heartened on progress in trade negotiations, especially with Canada backing down from a digital services tax over the weekend. They also are watching Congress’ attempt to pass the so-called “One Big Beautiful Bill” by the end of the week.
The blue-chip Dow closed up 0.63%, or 275.50 points, to 44,094.77; the S&P 500 rose 0.52%, or 31.88 points, to 6,204.95; and the Nasdaq gained 0.48%, or 96.28 points, to 20,369.73. For the quarter, the S&P 500 gained more than 10%, the Nasdaq rose more than 17%, and the Dow has climbed more than 4.5%.
The benchmark 10-year Treasury yield fell to 4.242%.
After President Donald Trump abruptly terminated trade talks with Canada late last week over Canada’s digital services tax, Canada rescinded its digital services tax in order to reopen discussions. U.S. and Canadian leaders hope to reach an agreement by July 21.
Meanwhile, the Senate is furiously voting on amendments to the mega tax bill to try to get the legislation over the finish line by July 4. However, the bill may still get stuck. Not all Republican senators or House representatives are on board, and with such a slim majority, the bill will need almost every vote to pass.
Trade progress
Investors initially cheered last week a breakthrough in trade talks with China. China agreed to approve export applications for rare earths to the U.S. Rare earths had been a sticking point between the two countries. China controls 90% of the world’s most powerful rare-earth magnets, and Ford Motor recently had to curtail some production due to a magnet shortage.
They also were relieved after the Trump administration signaled Trump’s self-imposed July 9 deadline for countries to sign trade deals or face higher tariffs could be extended. If Trump extends the deadline, it could delay the inflation hike many economists are predicting would come with high tariffs.
However, investors were reminded quickly that risks remain after Trump abruptly terminated talks with Canada over Canada’s digital services tax. Trump said he would announce new tariffs on Canada within days. Canada is one of the U.S.’s largest trading partners.
Stocks initially fell on the Canada trade news, but it wasn’t enough to keep sentiment down. Over the weekend, Canada rescinded its digital services tax to restart trade negotiations. The first payments from the digital services tax were initially set to be collected Monday.
Canadian Prime Minister Mark Carney aims to reach a trade deal with the U.S. by July 21.
National Economic Council director Kevin Hassett said he expected other countries to follow Canada’s lead and drop their digital services taxes, too. “My expectation is that the digital services taxes around the world will be taken off, and that that will be a key part of the … ongoing trade negotiations that we have,” he said in a CNBC interview.
He also said once the tax bill is passed, he expected “a marathon session” at the White House to go through trade deals with Trump.
Separately, Europe said it would buy more weapons from the U.S. to help pave the way for negotiating a trade deal.
Corporate news
- Moderna said an experimental flu vaccine showed positive results in a late-stage study. Shares of the biotech firm gained 1.58%.
- Hewlett Packard Enterprise and Juniper Networks shares rallied after the Department of Justice settled its lawsuit challenging Hewlett Packard Enterprise’ $14 billion acquisition of Juniper Networks. Hewlett shares jumped 11.08% and Juniper rose 8.45%.
- GMS shares rallied 11.73% after agreeing to be bought by Home Depot for about $4.3 billion.
- Facebook parent Meta stock climbed to a record high after the social media giant went on an artificial intelligence hiring spree. Shares closed up 0.61%.
- Oracle shares jumped 4% after a regulatory filing by the company disclosed a cloud deal that would add more than $30 billion in revenues annually starting in fiscal 2028 year.
- Joby Aviation soared 11.64% after the company delivered its first flying taxi to the United Arab Emirates.
Cryptocurrency
Trading app Robinhood is pushing into cryptocurrencies with new products that will allow customers to do more than just buy and sell cryptocurrencies. It is aiming to become a central hub for digital assets. Shares of Robinhood touched a 52-week high and closed up xxx% at $xxxx.
Bitcoin was last down 0.69% at $107,634.70.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
