On Monday, the last day of the second quarter, stock indices showed growth, driven by positive trade news and economic events. The S&P 500 ($SPX) closed the day up by 0.52%, the Dow Jones Industrials ($DOWI) gained 0.63%, and the Nasdaq 100 ($IUXX) rose by 0.64%. Meanwhile, September futures on the E-mini S&P (ESU25) and E-mini Nasdaq (NQU25) also posted positive changes, increasing by 0.44% and 0.56%, respectively.
This growth was driven by several factors, including new historical highs for the S&P 500 and Nasdaq 100, as well as the rise of the Dow Jones Industrials, which reached its highest level in the last 4.5 months. One of the supporting factors for the market was the news of progress in trade talks with China and the European Union. Negotiations with Canada also resumed, after the country lifted the digital services tax, and with India and Japan, which continued working on new trade agreements in Washington.
Additional support for the stock market came from the drop in Treasury bond yields. The 10-year Treasury yield fell to an 8-week low of 4.22%. This event strengthened hopes for a possible interest rate cut by the Federal Reserve in the future. Economic data, such as the decline in the MNI Chicago PMI business activity index and the Federal Reserve's Dallas manufacturing report, added weight to this hypothesis.
Influential news also came from China, where the PMI manufacturing index for June showed growth, surpassing expectations. Positive data strengthened the outlook for global economic growth, boosting investor confidence.
However, not everything was so positive. One factor putting pressure on stocks is the upcoming earnings season, which will begin next week. It is expected that the earnings growth of S&P 500 companies for the second quarter will be only 2.8% year-over-year, the slowest pace of growth in two years. This suggests that investors may face more restrained profit results in the coming months.
In this shortened holiday trading week, investors will closely monitor new economic data, including the ISM manufacturing index and employment reports. Trade talks and potential tax bills that may impact the market in the near future will also be in focus.
On foreign markets, the situation was mixed. European stocks showed a decline, while the Chinese market saw an increase. Japan's Nikkei Stock 225 rose to an 11-month high, which also contributed to the positive trend in global stock markets.
Thus, despite some economic challenges, global markets continued to move upward, thanks to positive trade and economic growth news, which gives investors confidence in further progress.
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