Tech stocks rally as Canada halts digital tax, U.S. trade negotiations gain momentum, and markets anticipate economic data and Fed commentary
Global markets started the week with a surge of optimism, as futures tied to the S&P 500 and Nasdaq indices climbed to record highs on Monday. The bullish momentum was driven by positive developments in U.S. trade negotiations and a temporary reprieve from digital taxation targeting American tech giants.
Shares of technology heavyweights including Amazon, Apple, Alphabet, and Meta Platforms rose between 0.5% and 2% in premarket trading. The uptick came shortly after Canada announced it would delay the implementation of its digital services tax, a move seen as a goodwill gesture to jumpstart stalled trade talks with the United States.
This strategic decision by Ottawa—coming mere hours before the tax was set to take effect—boosted investor sentiment and contributed to the broader rally across U.S. equities.
The S&P 500 and Nasdaq Composite had already notched all-time highs on Friday, buoyed by optimism over potential interest rate cuts and continued excitement around artificial intelligence. The blue-chip Dow Jones Industrial Average, however, remains 2.7% below its record closing high from December 4.
Kathleen Brooks, research director at XTB, commented on the current market mood: “The hope of rapid trade deals between the U.S. and its main trading partners is acting as a positive tailwind to the market. Thus, momentum could be a big driver of markets in the coming days and weeks.”
Attention now turns to a looming July 9 deadline, set for the U.S. to finalize trade agreements with key international partners. President Donald Trump has signaled flexibility, saying he may either extend the deadline or shorten it depending on the pace of negotiations.
Meanwhile, domestic policy developments are also under close watch. U.S. Senate Republicans made significant strides over the weekend in advancing President Trump’s comprehensive tax cut and spending bill. Final votes on a slew of amendments are expected to begin Monday morning at 9 a.m. EDT (1400 GMT).
Investors are eyeing this week’s key economic indicators, including the closely watched non-farm payrolls report and the ISM’s surveys on manufacturing and services. These figures will offer crucial insights into the health of the U.S. economy and help determine whether the current bull run in stocks can be sustained.
Adding to the high-stakes week, several Federal Reserve officials—including Chair Jerome Powell—are scheduled to speak, potentially offering more clues about the future trajectory of monetary policy.
As markets weigh both international diplomacy and domestic fiscal policy, all signs point to a highly eventful stretch ahead—one that could either reinforce or challenge Wall Street’s current optimism.
