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Trade deals, tame prices, better vibes lift S&P 500, Nasdaq to record highs. Dow jumps
U.S. stocks extended gains by midday, with the broad S&P 500 and tech-heavy Nasdaq climbing to record highs, on a final trade agreement with China, an expected trade pact with the European Union by President Donald Trump’s July 9 deadline, and hopes for more to come.
Trump said a deal had been signed with China, and Commerce Secretary Howard Lutnick said the U.S. was nearing agreements with ten other trading partners. The final China deal includes a commitment from China to deliver rare earths used in everything from wind turbines to jet planes, Lutnick told Bloomberg. It also includes easier tech restrictions, said China’s Ministry of Commerce.
Meanwhile, European Commission President Ursula von der Leyen and Lutnick expressed confidence a deal between the EU and U.S. coud be struck soon, according to Bloomberg. Lutnick said the EU had picked up the pace of negotiations in recent weeks.
Treasury Secretary Scott Bessent said in an interview on Fox Business he expected trade deals with 18 key trading partners to be wrapped up by Labor Day in September, suggesting Trump’s early July deadline would be extended.
At 12:21 p.m. ET, the blue-chip Dow added 1.26%, or 545.83 points, to 43,932.67, while the S&P 500 gained 0.79%, or 43.29 points, to 6,184.31 and the Nasdaq rose 0.58%, or 116.19 points, to 20,284.10. The S&P 500 and Nasdaq had been within striking distance of their record highs for the past couple of days but hadn’t mustered enough energy to hurdle them until now.
The benchmark 10-year Treasury yield slipped to 4.248%.
Americans also felt better in June than in May, according to the University of Michigan’s consumer sentiment survey. Its sentiment reading rose to 16.3% to 60.7 in June from May. Most of the improvement came as people’s inflation expectations fell.
Before the opening bell, the Fed’s preferred inflation gauge, or personal consumption expenditures (PCE) price index, rose 2.3% annually, as expected. The so-called core rate excluding food and energy, rose 2.7%, slightly higher than the 2.6% mean forecast.
The “inflation report shouldn’t be enough to give markets a significant scare, but it probably dashes the slim hopes investors had for a July rate cut,” said Bret Kenwell, U.S. investment analyst at trading platform eToro.
Meanwhile PCE, a measure of consumer spending, fell 0.3% in May from the prior month after adjusting for inflation, according to the Bureau of Economic Analysis. That was the first decline this year.
“This weakness is probably primarily just payback from the jump in spending earlier this year as consumers tried to buy goods ahead of the tariffs,” said Greg Wilensky, head of U.S. fixed income and portfolio manager at Janus Henderson. “The weakness in spending was on the goods side while spending on services increased.”
People walk around the New York Stock Exchange in New York, U.S., December 29, 2023. REUTERS/Eduardo Munoz
Corporate news
Nike’s quarterly results topped analysts’ expectations but the company warned tariffs are expected to increase its costs by $1 billion this fiscal year. It said it will pass some costs on to consumers and cut costs to deal with the added expense. Its sales outlook for the first three months of its fiscal year was better than forecasts. Shares of the mega sportswear company jumped 18.12%.
CorMedix plans to sell $85 million of stock in a public offering. Shares slumped 17.04%.
Cryptocurrency
Bakkt Holdings filed with the Securities and Exchange Commission to sell up to $1 billion in securities to potentially buy bitcoin and other digital assets.
Bitcoin last rose 0.29% to $107,272.70.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
This article originally appeared on USA TODAY: S&P 500, Nadsaq hit record highs on trade deals and tame inflation