S&P 500 hits new record high despite U.S.-Canada trade tensions

The Star

12 hours ago

NEW YORK, June 27 (Xinhua) -- U.S. stock index S&P 500 closed at record high on Friday, despite a brief retreat following U.S. President Donald Trump's announcement on terminating all trade talks with Canada.
The Dow Jones Industrial Average rose 432.43 points, or 1 percent, to 43,819.27, boosted by huge gains from Nike after a better-than-expected earnings report. The S&P 500 added 32.05 points, or 0.52 percent, to 6,173.07, a record close high for the first time since February. The Nasdaq Composite Index increased by 105.54 points, or 0.52 percent, to 20,273.46.
Nine of the 11 primary S&P 500 sectors ended in green, with consumer discretionary and communication services leading the gainers by adding 1.78 percent and 1.55 percent, respectively. Meanwhile, energy and health led the laggards by losing 0.50 percent and 0.17 percent, respectively.
Equities initially moved higher in the morning following comments by U.S. Commerce Secretary Howard Lutnick, who told Bloomberg News late Thursday that a framework agreement between China and the United States on trade had been finalized. However, momentum faded after Trump posted on Truth Social that negotiations with Canada were off, injecting fresh uncertainty into global trade dynamics.
"I can see where the risks are here -- if the trade is just hype from the White House and no deals are really forthcoming, then this market is going to roll over," Thierry Wizman, global FX and rates strategist at Macquarie Group. "Ultimately, this all comes back to growth in the U.S. economy and growth of earnings."
On the economic front, U.S. personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.1 percent in May on a seasonally adjusted basis, in line with expectations. The annual inflation rate came in at 2.3 percent, matching economists' forecasts. Core PCE price index, which strips out volatile food and energy costs, increased by 0.2 percent for the month and 2.7 percent year over year, slightly above expectations of 0.1 percent and 2.6 percent, respectively.
U.S. investor sentiment improved in June as inflation fears pulled back, according to the University of Michigan's latest survey released Friday. The headline sentiment reading rose to 60.7, up 16.3 percent from May and close to the Dow Jones estimate for 60.5. The index was still 11 percent below the same month a year ago. "Consumers continue to be concerned about the potential impact of tariffs, but at this time they do not appear to be connecting developments in the Middle East with the economy," survey director Joanne Hsu said in a statement.
In corporate news, Nike led gains across major indexes, with its shares surging 15.19 percent after the company reported quarterly earnings that topped Wall Street estimates. The sportswear giant also unveiled plans to offset potential tariff-related headwinds, which investors viewed positively.
Large-cap technology stocks were mixed. Tesla fell 1.34 percent, while Alphabet and Amazon gained more than 2 percent. Broadcom and Microsoft posted modest losses, while Nvidia and Meta Platforms were up more than 1 percent, continuing their recent upward momentum.
U.S. stock markets have shown resilience in recent weeks amid volatile geopolitical and economic headlines, as investors assess trade developments and incoming economic data for clues on the Fed's next moves.