Investment update

Weekly insight into the marketplace.

June 30 to July 4, 2025

The second half of 2025 started strong

Monday marked the end of a turbulent three-month period that saw the major North American stock indexes rally from steep losses in April to close the second quarter at, or near, record highs. Hope that the U.S. will soon reach trade agreements with key partners (including Canada) continued to drive positive performance. The S&P 500 and Nasdaq each rose around half a percentage point and closed with quarterly gains of 10.57% and 17.75%, respectively. The Dow added 0.63% to end the quarter slightly below its last record close set in December. Canada’s TSX closed Monday at a record high, advancing 0.62% on its way to posting a quarterly return of 7.78%. With the TSX shutdown for Canada Day on Tuesday, the benchmark U.S. stock indexes turned in mixed performances as a cautious sentiment returned with the 90-day pause on U.S. President Donald Trump’s “Liberation Day” tariffs set to expire on July 9. The S&P 500 dipped 0.11% and the Nasdaq slid 0.82%, while the Dow rose 0.91%. On Wednesday, the S&P 500 and Nasdaq bounced back to close at record levels, while the Dow was essentially flat, despite some investor concern in early trading over weaker-than-expected U.S. private sector payrolls data for June. The resource-heavy TSX also edged up, tacking on another 0.05%, as stronger oil prices bolstered performance in its influential energy sector. The positive momentum carried over to Thursday. Holiday-shortened trading sessions on Wall Street ended with all the major stock indexes advancing close to 1% after data showed U.S. nonfarm payrolls grew by more than expected last month, which helped reduce some of the previous day’s unease over the health of the U.S. economy. The TSX climbed 0.61% higher led by technology stocks. On Friday, the TSX ticked up 0.01% to close above the 27,000-point level for the first time. U.S. markets were closed for Independence Day.

Canada-U.S. trade talks resumed

On Monday, Prime Minister Mark Carney confirmed that he and President Trump had agreed to recommence trade and security negotiations aimed at reaching a deal between the nations by July 21. The previous Friday, President Trump had terminated the talks in protest of Canada’s digital services tax on American tech companies. By late Sunday, the Canadian government said it would rescind the tax. When announcing the decision, Finance Minister François-Philippe Champagne, who only a week before had insisted the tax was going ahead, said the move would allow negotiations between the countries “to make vital progress.” The next day, when asked by media if Canada would receive anything in exchange for dropping the tax, the Prime Minister explained: “It was something that we expected, in the broader sense that would be part of a final deal. We’re making progress towards a final deal. There’s more to be done, to be clear.” Reaction from the White House was more bellicose, with Press Secretary Karoline Leavitt telling reporters “It was a mistake for Canada to vow to implement that tax that would have hurt our tech companies here in the United States.”

Trump approved a massive tax and spending bill

Following months of fierce debate, culminating in close votes in the U.S. Senate on Wednesday and the House of Representatives on Thursday, Republicans passed what they have termed the "Big Beautiful Bill" outlining trillions of dollars in tax breaks and spending cuts. A major focus of the bill is the extension of US$4.5 trillion in tax breaks enacted during President Trump’s first term and set to expire, along with new measures including making tips and overtime pay tax deductible for workers and other deductions for many older Americans. The bill also sets aside close to US$350 billion for national security and deportation measures, including funding for a “Golden Dome” defensive system over the U.S. To help pay for the tax cuts, the package includes US$1.2 trillion in spending cuts to health care and food stamp programs and a significant rollback of green energy tax credits. President Trump signed the bill at a ceremony at the White House on Friday.