Tariff optimism lifts shares after US-China deal
The analyst added: 'Even the release of PCE data hasn't sparked major volatility. The buying momentum after the de-escalation and ceasefire in the Middle East really has been mind-boggling. Dip buyers have had the hand in the past five years, particularly when bullish catalysts come into play (or bearish catalysts fade away). A three-month recovery took the [S&P 500] back from 4,800 all the way to 6,160 current levels.'
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Reuters
an hour ago
- Reuters
TRADING DAY Wall Street's twin peaks
ORLANDO, Florida, June 27 (Reuters) - - TRADING DAY Making sense of the forces driving global markets By Jamie McGeever, Markets Columnist I'd love to hear from you, so please reach out to me with comments at opens new tab. You can also follow me at @ReutersJamie and @ Just a heads up, Trading Day will be in the capable hands of Lewis Krauskopf next week and Alden Bentley the following week, while I take some time off to recharge the batteries. Back on July 13. Another extraordinary week ended on Friday with the S&P 500 and Nasdaq hitting all-time highs as investors ramped up bets that U.S. interest rates will soon fall, a stunning turnaround from the post-'Liberation Day' tariff gloom of early April. Several developments this week fed into the rate cut narrative - the Iran-Israel ceasefire, tumbling oil prices, soft U.S. economic data, dovish comments from some Fed officials, and renewed pressure from President Donald Trump on the Fed to ease. Fed Chair Jerome Powell pushed back against suggestions rates could be cut as soon as July, arguing that the impact of tariffs should be assessed first, and the consensus among the Fed's 19 rate-setters is to hold the line too. But traders are now leaning towards three quarter-point rate cuts this year. Progress on trade is also boosting investor sentiment. Trump said a deal between the US and China had been signed, but did not provide details, and Treasury Secretary Scott Bessent said the two countries have resolved issues surrounding shipments of rare earth minerals and magnets to the US. That said, trade optimism was dented on Friday after Trump abruptly cut off trade talks with Canada over its new tax on U.S. technology firms, calling it a "blatant attack" and saying he will set a new tariff rate on Canadian goods next week. The most significant market move of the week, however, was not in equities but in currencies. The dollar continued its decline, and is now down more than 10% this year. That's its worst first-half performance of any year in more than 50 years. It should be remembered, however, that the dollar started the year at extremely expensive levels, so some adjustment was always likely. This is proving to be a pretty severe adjustment, one which markets and policymakers appear to be relaxed about. For now. This Week's Key Market Moves Chart of the Week Self-explanatory really. When the world's reserve currency has its steepest January-June decline since the era of free-floating exchange rates began over half a century ago, something major is underway. How big remains to be seen. But if the Trump administration wanted a weaker currency, it can't complain. Here are some of the best things I read this week: What could move markets on Monday? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, opens new tab, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.
Reuters
an hour ago
- Reuters
S&P 500 record fueled by earnings strength, easing tariff fear
NEW YORK, June 27 (Reuters) - Investors have shifted from panicking about tariffs to relief buying, lifting the U.S. stock market storm back to record highs as corporate earnings and the U.S. economy held up better than many had expected through a period of dramatic policy change. The S&P 500 (.SPX), opens new tab, seen as the benchmark for the U.S. stock market, closed at 6,173.07 on Friday, up 0.5% on the day -- its first close above 6,144.15, its previous all-time closing high from February 19. In the intervening period, the S&P 500 fell as much as 18.9% on a closing basis from the February level to April 8, nearly enough to label the decline a bear market. Stocks plunged after President Donald Trump's "Liberation Day" tariff announcement on April 2 sparked broad concerns about an impending recession. Worries eased as Trump moderated his harshest tariffs, and the market rebounded. The Nasdaq Composite (.IXIC), opens new tab also closed at a record high on Friday, its first all-time peak since December 16, confirming the tech-heavy index is in a bull market. Stocks got their latest boost this week from easing fears about conflict in the Middle East after Trump's announcement of a ceasefire between Israel and Iran and optimism about the Federal Reserve lowering borrowing costs in coming months. The past four months in the market reflected deep concerns about Trump's trade and tax policy, said Rick Meckler, partner at Cherry Lane Investments in New Jersey. "In the investment public's mind, it went from a sense of tremendous pessimism to what seems to be optimism that this will all fall into place," Meckler said. Policy risk, however, is "still there." As worries eased, volatility measures have fallen dramatically. The Cboe Volatility Index (.VIX), opens new tab, an options-based measure of investor anxiety, spiked in early April, hitting 60 and closing as high as 52.33 on April 8, its highest closing level in five years. The VIX index has since receded to just above 16, below its long-term median of 17.7. The market appears to be pricing downside risk at levels similar to those seen before early April, when Trump unveiled his tariffs, said Garrett DeSimone, head quantitative analyst at OptionMetrics. But unlike the post-election rally late last year, sentiment does not appear excessively bullish or complacent, he said. Investors said a stronger-than-expected first-quarter earnings season for U.S. companies helped drive the rebound in stocks. S&P 500 company profits overall rose 13.7% from a year earlier, compared to an 8% gain expected as of April 1, according to LSEG IBES. "This was one of the most furious comebacks ever from a near bear market, as trade worries were overblown, but so were all the recession calls," said Ryan Detrick, chief market strategist at Carson Group. "The economy is hanging in there and overall first-quarter earnings were quite solid, sparking the huge rally." However, investors appear to be more concerned about the corporate outlook from here. Estimates for earnings growth for each of the next four quarters have fallen from expectations at the start of April. Investors have grown more upbeat about the stock market. Bearish sentiment in early April had reached its highest levels since the financial crisis, according to the weekly American Association of Individual Investors (AAII) Sentiment Survey. While sentiment has trended more positively, bullish sentiment is still below the historical average. Also driving the rally has been renewed strength of the "Magnificent Seven" megacap tech and growth stocks. That group, which includes Microsoft (MSFT.O), opens new tab, Nvidia (NVDA.O), opens new tab and Amazon (AMZN.O), opens new tab, had led equity indexes higher the prior two years but had gotten off to a rocky start in 2025. Since April 8, the Roundhill Magnificent Seven ETF (MAGS.Z), opens new tab has jumped about 37% against a roughly 24% rise for the S&P 500. Fueled by the Magnificent Seven, the S&P 500 posted back-to-back annual gains of over 20% in 2023 and 2024. Even with the latest record-high push, the index is up about 5% in 2025. "I don't think anyone is really thinking this is an explosive year as the last two were," Meckler said. "I think it's more, 'Gee, we've come back a long way from the sell-off, and if we finish the year positive 5% to 10%, that would be a great year, given all that's happened.' "
Leader Live
2 hours ago
- Leader Live
M&S boss criticises post-Brexit food labelling as ‘bureaucratic madness'
Stuart Machin described 'yet another layer of unnecessary costs and red tape for retailers', as he revealed that more than 1,000 M&S products destined for Northern Ireland will need to have a 'Not for EU' sticker affixed from next week. These labels have been phased in since 2023 when the post-Brexit trading deal was agreed. The Windsor Framework was negotiated by the UK and EU to address issues which had arisen in the operation of the Northern Ireland Protocol which effectively keeps Northern Ireland within the EU for trade. Next week sees the final phase of the Windsor Framework come into effect, adding yet another layer of unnecessary costs and red tape for food retailers like M&S. – 1000+ M&S products destined for Northern Ireland will need to have a 'Not For EU' label stuck on them. – Another… — Stuart Machin (@MachinStuart1) June 27, 2025 However, rules were needed to ensure goods for the UK did not enter the EU single market in the Republic of Ireland. Earlier this month the UK Government indicated it would hope for a smoother flow of trade when its new sanitary and phytosanitary (SPS) deal with the EU is finalised. Mr Machin indicated he was hopeful that the stickers may become unnecessary following the new deal. He took to social media on Friday to express his frustration. 'Next week sees the final phase of the Windsor Framework come into effect, adding yet another layer of unnecessary costs and red tape for food retailers like M&S. – 1000+ M&S products destined for Northern Ireland will need to have a 'Not For EU' label stuck on them,' he posted on the social media platform X. 'Another 400 will need to go through additional checks in the 'Red Lane'. 'Quite frankly it's bureaucratic madness, confusing for customers, and completely unnecessary given the UK has some of the highest food standards in the world. 'The Government's SPS deal with the EU will be game-changing, and it can't come soon enough!'
