Ending first half on a record high note

Making sense of the forces driving global markets

By Lewis Krauskopf, Markets Reporter 

Jamie is enjoying some well-deserved time off, but the Reuters markets team will still keep you up to date on what moved markets.

Today we're closing the books on a turbulent first half of 2025. Trade, which has been the propelling story for markets this year, was once again a key driver on Monday. I'd love to hear from you, so please reach out to me with comments at Lewis.Krauskopf@thomsonreuters.com.

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A tumultuous first half of the year for Wall Street closed on Monday with stocks on a roll, as the S&P 500 and Nasdaq again minted records.

The two indexes built on gains after ending on Friday at record highs for the first time in months. The Dow was also in striking distance of a record peak, closing about 2% from the blue-chip index's milestone.

Graphics are provided by Reuters.

As it has for months, trade news continued to be a dominant theme for markets. The United States said it would resume trade negotiations with Canada after Ottawa halted plans to begin collecting a new digital services tax targeting U.S. technology firms just hours before it was due to start.

The digital levy had caught the ire of President Trump last week, prompting the U.S. to cancel trade talks with Canada.

Focus was also on a looming July 9 deadline, the end of a pause on many of Trump's harsher trade tariffs. Treasury Secretary Scott Bessent warned countries may not get extensions of that deadline, even if - as he suggested previously - they are negotiating in good faith.

The dollar continued to struggle on Monday, another theme for the year so far. The greenback marked its sixth straight month of losses against a basket of major currencies and the euro hit its highest level against the dollar in nearly four years.

Another first-half topic likely not going away anytime soon? Trump pressuring Federal Reserve chair Jerome Powell to lower interest rates. White House reporters were told on Monday that Trump sent a handwritten note to Powell urging him to ease rates, the latest complaint the president has levied against the central bank chief.

To some extent, the pressure may be seeping into markets. Fed funds futures have indicated investors expect nearly three cuts this year, more than they did a few weeks ago. Treasury yields continued their recent descent, with the benchmark 10-year yield around 4.23%.

Elsewhere in Washington, Senate Republicans were trying to get Trump's sweeping tax-cut and spending bill over the line. Trump wants his fellow Republicans to get it passed before the July 4 Independence Day holiday, but there are divisions within the party about its expected $3.3 trillion hit to the nation's debt pile. 

Investors also were turning attention to economic data in the holiday-shortened week, with the monthly U.S. jobs report due on Thursday.  

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