U.S. stocks finished higher on Friday, with the S&P 500 closing at a new all-time high—now up 23% from its April 8 low. All three major indexes posted weekly gains of around 4%, driven by falling oil prices and easing trade tensions that lifted investor sentiment.
The S&P 500 surpassed the record it set four months ago, while the Nasdaq climbed past its previous high from last December. The Dow lagged behind, ending the week about 3% below its historic peak.
While ongoing trade tensions with Canada pose a potential risk to the market, it may not be significant enough to derail the bullish momentum heading into next week. Next week will be cut short with the market closed on Friday for Independence Day.
Trade Update
U.S. Commerce Secretary Lutnick announced that 10 additional trade agreements are nearing completion, though specific details have not yet been released.
President Donald Trump announced Friday that the United States is ending all trade negotiations with Canada in retaliation for its digital services tax, and warned that a new round of tariffs could be imposed within a week.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately. 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 social media.
Speaking on CNBC, Treasury Secretary Scott Bessent said the administration is likely to initiate a Section 301 investigation into Canada’s tax policy—a legal tool previously used to justify tariffs against China, potentially setting the stage for additional duties on Canadian imports.
The U.S. and Canada share one of the world’s largest bilateral trade relationships, with more than $900 billion in goods and services exchanged last year. But trade tensions have grown since Trump’s return to office, with the president reviving threats of 25% tariffs on Canadian imports and even suggesting that Canada should be absorbed as the 51st U.S. state.
Trump has already imposed tariffs on a range of Canadian exports, including steel, aluminum, automobiles, and other goods, further straining economic ties between the two nations.
Economic Data Summary
- PCE Prices (Headline): Rose 0.1% month-over-month (MoM) and 2.3% year-over-year (YoY), both matching expectations.
- Core PCE Prices: Excluding food and energy, Core PCE increased 0.2% MoM (above the 0.1% estimate) and 2.7% YoY (above the 2.6% forecast).
- Personal Income: Fell 0.4%, missing expectations of a 0.3% gain.
- Personal Spending: Declined 0.1%, compared to a forecasted 0.1% increase.
- Q2 GDP – 3rd Estimate: Revised down to -0.5% from the prior -0.2%.
- Durable Goods Orders: Surged 16.4% in May to a record $343.59B, well above the expected 7.5% increase. Transportation equipment led the gain. Ex-transportation, durable orders rose 0.5% (vs. 0.1% expected).
- New Home Sales: Came in at 623,000, missing expectations of 690,000.
- Consumer Confidence (Conference Board): Fell to 93.0, below the expected 99.5.
- University of Michigan Sentiment: Final June reading rose slightly to 60.7 (vs. 60.5 preliminary), up from 52.2 in May.
- Initial Jobless Claims: Dropped by 11,000 to 236,000 (below the 249,000 estimate), while continuing claims rose 37,000 to 1.974 million.
- Atlanta Fed GDPNow (Q2 Estimate): Revised down to +2.9% from +3.4% on June 18.
Markets & Rates
- Treasury Yields: Eased across the curve this week:
- 2-year yield: down 16 bps to 3.74% (from 3.90%)
- 10-year yield: down 11 bps to 4.26% (from 4.37%)
- 30-year yield: down 8 bps to 4.81% (from 4.89%)
The curve steepened as short-term rates fell more than long-term ones.
Fed Policy Outlook
- Rate Cut Odds Increase:
Dovish comments from Fed Governor Michelle Bowman and Chicago Fed President Austan Goolsbee boosted expectations for easing.- July FOMC: Probability of a 25 bps rate cut rose to 20% (from 16% a week ago).
- 2025 Outlook: Markets now pricing in 2.55 total 25-bps cuts for the year, up from 2.05 last week (Bloomberg data).
Cryptocurrency Update
XRP Price Spikes as Ripple CEO Declares Legal Battle with SEC Is “Chapter Done”
XRP surged after Ripple CEO Brad Garlinghouse announced the company is dropping its cross appeal against the U.S. Securities and Exchange Commission, marking what many see as the final chapter in one of crypto’s most high-profile legal disputes.
With the SEC also expected to withdraw its own appeal, the move clears the path for XRP to regain full institutional adoption and resume trading on major exchanges.
“Ripple is dropping our cross appeal, and the SEC is expected to drop their appeal, as they’ve previously said,” Garlinghouse posted on X. “We’re closing this chapter once and for all, and focusing on what’s most important – building the Internet of Value.”
The announcement sparked an immediate reaction in the market. Prominent crypto attorney John E. Deaton summed up the moment with a succinct post: “And then it ended,” referencing the legal cloud that has loomed over XRP since 2020.
XRP advocate CrediBULL Crypto also welcomed the news, responding to Garlinghouse with: “Lock in. It’s gonna be a fun ride :)” However, his enthusiasm drew criticism from some users accusing him of promoting XRP for compensation.
CrediBULL defended his stance by pointing to XRP’s longstanding market position.
“A coin that has been in the Top 3 for years and is also one of the first 3 crypto coins ever created doesn’t need to pay influencers to shill it lol,” he wrote.
FHFA Directs Fannie Mae and Freddie Mac to Prepare for Crypto in Mortgage Risk Assessments
On Wednesday, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to begin preparations for recognizing cryptocurrency as an asset in single-family mortgage loan risk assessments.
FHFA Director William Pulte announced the move on social media, stating, “After significant studying, and in keeping with President Trump’s vision to make the U.S. the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage.”
The directive marks a major step in the Trump administration’s broader push to integrate digital assets into the U.S. financial system and increase institutional adoption of crypto technologies.
Strategy co-founder Michael Saylor welcomed the move, calling it “a defining moment for institutional BTC adoption and collateral recognition.”
What to Watch:
Economic:
- Monday (6/30): Chicago Purchasing Managers’ Index (PMI)
- Tuesday (7/1): Construction Spending, ISM Manufacturing Index.
- Wednesday (7/2): ADP Employment Change, EIA Crude Oil Inventories, MBA Mortgage Applications Index.
- Thursday (7/3): Nonfarm Payrolls, Unemployment Rate, Average Workweek, Average Hourly Earnings, Continuing Claims, EIA Natural Gas Inventories, Initial Claims, Factory Orders, Trade Balance.
- Friday (7/4): -no reports.
Earnings:
- Monday (6/30): Progress Software Corp. (PRGS), Barnes & Noble Education Inc. (BNED), Petmed Express Inc. (PETS)
- Tuesday (7/1): MSC Industries Direct Co. (MSM), Constellation Brands Inc. (STZ), Greenbrier Companies Inc. (GBX)
- Wednesday (7/2): UniFirst Corp. (UNF), Radius Recycling Inc. (RDUS), Franklin Covey Co. (FC)
- Thursday (7/3): -no reports
- Friday (7/4): -no reports
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