US stocks extend gains to conclude first half of 2025

U.S. stocks continued to climb higher on Monday as signs of progress in trade negotiations buoyed investor sentiment, closing out one of the most volatile first halves in recent years.

The Dow Jones Industrial Average rose 275.50 points, or 0.63 percent, to 44,094.77. The S&P 500 added 31.88 points, or 0.52 percent, to 6,204.95. The Nasdaq Composite Index increased 96.28 points, or 0.47 percent, to 20,369.73.

Nine of the 11 primary S&P 500 sectors ended higher, with technology and financials leading the advance by rising 0.98 percent and 0.86 percent, respectively. Consumer discretionary and energy lagged behind, falling 0.86 percent and 0.66 percent.

Monday's gains came after Canada announced it would withdraw its digital services tax, a move widely seen as an effort to smooth relations with the United States just days after U.S. President Donald Trump declared an end to all trade discussions with Ottawa. The tax, which was set to take effect Monday, would have targeted major tech firms such as Google, Meta, and Amazon.

Market participants are now looking ahead to the expiration of Trump's 90-day tariff pause next week. Also on Monday, U.S. Treasury Secretary Scott Bessent said some countries are "negotiating in good faith," though he warned that tariffs could return to previously announced levels if talks falter.

Meanwhile, attention turned to the U.S. Senate, where lawmakers began a marathon session to debate amendments to Trump's proposed 4.5 trillion U.S. dollars tax package. The Congressional Budget Office projected the bill could add 3.3 trillion dollars to the federal deficit over the next ten years.

Despite the looming tariff deadline and uncertainty surrounding the tax legislation, analysts believe strong equity fundamentals and broader market participation could sustain the recent rally. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, noted that improving breadth supports the view that gains may continue into the second half of the year.

"While the market has had much to digest the first six months of 2025, resiliency has prevailed," Leslie Falconio, head of taxable fixed income strategy at UBS Financial Services, wrote last Friday. "However, we are not out of the woods just yet, as bouts of volatility and pockets of vulnerability are expected in the second half of the year."

Among individual movers, Apple surged 2.03 percent after Bloomberg reported the company may integrate AI technology from OpenAI or Anthropic into its Siri voice assistant. Broadcom rose 2.34 percent, while Nvidia, Microsoft, and Meta Platforms posted modest gains. On the downside, Amazon and Tesla fell nearly 2 percent, and Alphabet declined 0.49 percent.