Stock market momentum could persist due to positive sentiments stemming from trade deal expectations.
As the trading week commences on Monday, 2nd of July, 2025, the North American markets are expected to open with a mix of positive and negative sentiments. The Dow Jones Industrial Average futures are up by 0.1%, indicating a slightly positive open, while the S&P 500 and Nasdaq 100 futures are showing a modestly lower open, down by 0.1% and 0.3% respectively [1].
This mixed futures activity comes after a period of volatility, with the S&P 500 and Nasdaq Composite hitting all-time highs but pulling back slightly, while the Dow moved closer to new highs [1]. Investors are keeping a close eye on trade talks, with a deadline set by the U.S. administration for imposing massive tariffs if no agreements are reached with key trade partners by July 9 [1][2].
The outcome of these negotiations is crucial, not just for the U.S. economic outlook, but also for Canadian business activity, given Canada's significant trade ties with the U.S. Market participants are also watching Washington’s legislative actions, including tax and spending bills, which could impact economic conditions [1].
The current economic backdrop includes a surprising decline in private sector jobs in June, adding uncertainty to the market and influencing Federal Reserve decisions on interest rates [1].
Elsewhere, the German DAX Index is down by 0.2 percent, and the U.K.'s FTSE 100 Index is also down by 0.2 percent in the major European markets [1]. Crude oil futures are slipping $0.16 to $65.36 a barrel [1], while gold futures are inching up $8.50 to $3,296.10 an ounce [1].
In positive news, Canada has rescinded its digital services tax on American tech firms, a move that was in response to President Donald Trump's statement about ending trade talks due to the digital services tax [1]. The Canadian Finance Minister, Francois-Philippe Champagne, stated that this move will allow for progress in negotiations of a new economic and security relationship with the United States.
The Chicago business barometer is expected to rise to 43.0 in June from 40.5 in May, a reading that, while still indicating contraction, suggests a slight improvement in business activity [1]. The Chicago-area business activity report is scheduled to be released by MNI Indicators.
Overseas markets are also in motion, with China's Shanghai Composite Index climbing by 0.6 percent, Japan's Nikkei 225 Index advancing by 0.8 percent, and the French CAC 40 Index up by 0.1 percent [1]. The U.S. dollar is trading at 144.45 yen and $1.1709 against the euro [1].
The Nasdaq surged by 4.3 percent for the week, and the S&P 500 shot up by 3.4 percent, while the Dow Jones Industrial Average jumped by 3.8 percent for the week [1]. The upward momentum on Wall Street is due to ongoing optimism about trade deals.
As the new trading week unfolds, investors will be watching these developments closely, seeking guidance from additional data and progress on trade to determine the market's direction.
Investors are looking towards the trade talks with key trade partners, as a deadline set by the U.S. administration for imposing massive tariffs is looming on July 9, and a resolution could potentially impact North American markets, both in terms of stock-market performance and finance. Given the current economic backdrop and the recent rise in the S&P 500 and Nasdaq, some investors might see this as a prime opportunity for investing in the stock-market.
