U.S. stock futures are signaling a positive start on Monday, suggesting that equities could extend their gains after a mostly upbeat but volatile session to close last week.
The growing optimism around potential trade agreements is fueling the upward trend, as investors anticipate the upcoming deadline for reciprocal U.S. tariffs scheduled for early next month.
Adding to the positive sentiment, Canada recently withdrew its digital services tax on American technology companies—a levy initially set to take effect today.
This reversal followed President Donald Trump’s announcement last Friday that trade negotiations with Canada had stalled because of the tax.
“Rescinding the digital services tax will allow the negotiations of a new economic and security relationship with the United States to make vital progress and reinforce our work to create jobs and build prosperity for all Canadians,” said Canadian Finance Minister Francois-Philippe Champagne.
Friday’s trading was marked by notable volatility after a sharp early rally. The major indexes experienced significant swings throughout the day, yet the S&P 500 and Nasdaq closed at record highs.
By the end of the day, the markets rebounded from midday declines with the Dow climbing 432.43 points, or 1.0%, to 43,819.27; the Nasdaq gaining 105.55 points, or 0.5%, to 20,273.46; and the S&P 500 rising 32.05 points, or 0.5%, to 6,173.07.
Looking at the week’s performance, the tech-heavy Nasdaq surged 4.3%, the Dow rose 3.8%, and the S&P 500 increased by 3.4%.
The initial boost in stocks came after President Trump suggested that the U.S. had reached an agreement with China.
Later, a White House official clarified that the two countries agreed to “an additional understanding of a framework to implement the Geneva agreement.”
Following that, a spokesperson from China’s Ministry of Commerce confirmed that both sides “have confirmed the details of the framework.”
The Chinese official added that Washington would remove “restrictive measures,” while Beijing would “review and approve” items under export controls.
Meanwhile, Commerce Secretary Howard Lutnick told Bloomberg that the Trump administration expects to soon finalize agreements with ten major trade partners.
However, stocks took a sharp downturn in afternoon trading after Trump declared he was halting trade talks with Canada over its digital services tax on U.S. tech firms.
“We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period,” Trump posted on Truth Social.
On the economic data front, the Commerce Department published a report including the Federal Reserve’s preferred measures of consumer price inflation.
The report showed that consumer prices in May rose in line with expectations, though core prices increased slightly more than forecast.
“Today’s release revealed a little more core inflation than expected based on CPI and PPI data, but not enough to concern anyone,” said FHN Financial Chief Economist Chris Low.
Additionally, a University of Michigan report showed consumer sentiment improved modestly more than anticipated in June.
Retail stocks shone during the day, helping the Dow Jones U.S. Retail Index jump 1.8% to its highest close in over four months.
Airline stocks also showed strength, with the NYSE Arca Airline Index climbing 1.5%.
In contrast, gold stocks declined sharply alongside the metal’s price, dragging the NYSE Arca Gold Bugs Index down 4.0%.