US stocks add a bit more to their all-time high

Key Points

• Asian shares were mixed as Tokyo’s Nikkei gained 0.6% while Hong Kong’s Hang Seng fell 0.3% and Shanghai Composite rose 0.5%, reflecting cautious optimism after U.S. markets closed at record highs.
• The S&P 500 hit a record high of 6,173.07, the Nasdaq composite reached 20,273.46, and the Dow climbed to 43,819.27, with broad sector gains and Nike soaring 15.2% despite tariff warnings.
• Canada’s decision to cancel a planned tech tax and resume U.S. trade talks helped steady markets, but a pause on retaliatory U.S. tariffs is set to expire July 9, risking renewed tensions.
• Inflation remains above the Fed’s 2% target, with May’s PCE index at 2.3%, causing the central bank to hold off on rate cuts so far in 2025 amid concerns that tariffs could reignite price pressures.

NEW YORK (AP) — 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% higher in its first trading after completing a stunning rebound from its springtime sell-off of roughly 20%. The Dow Jones Industrial Average was up 146 points, or 0.3%, as of 10:30 a.m. Eastern time, 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, U.S. President Donald 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 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,” 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% after the supplier of specialty building products said it agreed to sell itself to a Home Depot subsidiary in a deal that would pay $110.00 per share in cash. That would give it a total value of roughly $5.5 billion, including debt.

Less than two weeks ago, another company, QXO, said it was offering to buy GMS for $95.20 per share in cash. After the announcement of the Home Depot bid, QXO’s stock rose 1.9%, and Home Depot’s stock slipped 0.5%.

Hewlett Packard Enterprise rallied 13.1% and Juniper Networks climbed 8.4% 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 $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.

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% from 4.29% late Friday.

In stock markets abroad, indexes dipped modestly in Europe following a more mixed finish in Asia.

Stocks fell 0.9% in Hong Kong but rose 0.6% 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.

___

AP Business Writer Elaine Kurtenbach contributed.