S&P 500, Nasdaq at record highs as trade hopes feed quarterly momentum

NEW YORK: The S&P 500 and Nasdaq edged up to fresh record highs on Monday, as optimism over the US striking trade deals with its key partners fed into a rally that put the main indexes on track for quarterly gains.

The Nasdaq, S&P 500 and Dow Jones have gained 17.5%, 10.3% and 3.4% so far in the quarter, touching and then retreating from record levels since late last year, mainly driven by headlines around President Donald Trump’s rapid policy changes.

The three indexes are still set for their weakest first-half performances since 2022, as the resulting uncertainty around US policies has kept investors wary.

The blue-chip Dow remains 2.3% below its record closing high reached on December 4. The benchmark S&P 500 and the tech-heavy Nasdaq climbed to all-time highs on Friday, a sharp recovery from their April slump, when Trump imposed sweeping tariffs.

Since then, trade deals with China and the UK have fueled optimism that an all-out global trade war can be avoided. On Sunday, Canada scrapped its digital services tax targeting US tech firms, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States. .

But US Treasury Secretary Scott Bessent warned on Monday that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, and any potential extensions will be up to Trump.

“There’s hope that eventually there will be some sort of accordance with US trading partners and that the slowness in economic activity will prevent inflation from getting out of hand,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“So you have the prospects of good earnings, the Fed cutting rates perhaps in September and that’s causing a lot of momentum buying.”

Meanwhile, US Senate Republicans will try to pass Trump’s sweeping tax-cut and spending bill, despite divisions within the party about its expected $3.3 trillion hit to the $36.2 trillion national debt. Trump wants the bill passed before the July 4 Independence Day holiday.

Key economic data releases this week include monthly non-farm payrolls and the Institute for Supply Management’s survey on manufacturing and services sectors for June.

Several US central bank officials including Federal Reserve Chair Jerome Powell are scheduled to speak later this week.

The S&P 500 posted 36 new 52-week highs and one new low while the Nasdaq Composite recorded 87 new highs and 55 new lows.