Stocks Rally on Trade Optimism, Rate Cut Hopes, and Easing Geopolitical Tensions

Index Update: U.S. stocks were poised to open higher, building on last week's strong gains as easing geopolitical tensions and a softer U.S. trade stance boosted market sentiment. The S&P 500 and Nasdaq 100 futures hit record highs, while the Dow was set to rise by 300 points. A trade agreement between the U.S. and China prevented renewed tariffs, and President Trump indicated flexibility on the upcoming tariff deadline. Canada also dropped its digital services tax, benefiting U.S. tech firms. Meta and Alphabet were set to rise over 2%, and Juniper Networks jumped 9% following a legal resolution tied to its HP acquisition.

Market Movers: On Friday, the top gainers were Locafy Limited (+225.49%), followed by Blue Gold Limited (+210.79%). On the contrary CID HoldCo, Inc (-47.23%) Liminatus Pharma, Inc (- 42.89%) declined the most the same day.

Commodities Update: Crude oil prices fell sharply, with WTI and Brent both hitting multi-month lows after their steepest weekly drops in over two years. The decline was driven by easing Middle East tensions, particularly the continued ceasefire between Israel and Iran, and expectations that OPEC+ will raise output further in August. Although Iran expressed doubts about the truce's longevity, sentiment was also influenced by potential U.S. sanctions relief and upcoming trade deal deadlines. Gold prices rebounded amid a weaker U.S. dollar and easing geopolitical risks. The precious metal was supported by optimism over several potential U.S. trade agreements, including deals with China, India, Mexico, and Vietnam. Market participants are now turning their attention to key U.S. labor data, which could impact expectations for future Federal Reserve rate decisions.

Macro Update: The U.S. dollar index remained near its lowest level since early 2022, pressured by a more dovish Fed outlook, fiscal concerns tied to a $3.3 trillion spending bill, and trade uncertainty. Investors are closely watching upcoming employment data for signs of labor market weakness, which could prompt rate cuts as early as July. Meanwhile, easing geopolitical tensions, including a stable Israel-Iran ceasefire, have reduced safe-haven demand, with the dollar hitting multi-year lows against both the pound and Swiss franc.

Bonds Commentary: The U.S. 10-year Treasury yield dipped to 4.25%, nearing a two-month low, as markets focused on President Trump's proposed $3 trillion spending bill and rising expectations of Fed rate cuts. The bill advanced in the Senate and could be passed before the Independence Day holiday. Economic data has reinforced hopes for at least two rate cuts this year, while investors await key jobs and PMI reports, along with progress in trade negotiations ahead of the July 9 deadline.

Futures Update: U.S. stock futures moved higher as investor sentiment improved following Canada’s decision to cancel a digital services tax targeting American tech companies, and optimism grew over potential upcoming U.S. trade deals. Major indexes recently closed at record highs, with the Nasdaq entering bull market territory after a significant rebound. Meanwhile, a drop in consumer spending and persistently high inflation have strengthened expectations of interest rate cuts by the Federal Reserve, with markets heavily favoring a reduction in the near future.

After a sharp increase early in the session, stocks experienced significant volatility throughout Friday's trading. The S&P 500 gained 32.07 points, or 0.52%, closing at 6,173.08 — a new all-time high. From a technical analysis standpoint, the index found support at the 20-period EMA and gradually moved higher, signaling the possibility of a short-term upward trend. Additionally, the 14-period RSI is trending upwards, indicating sustained momentum for further buying and potential gains. The key support level is around 6,000, with resistance expected near 6,300.