U.S. stocks rose Monday, ending a strong month on a positive note on further trade optimism, while President Donald Trump’s tax cut bill advanced in the Senate.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average traded 175 points, or 0.4%, higher, the S&P 500 index gained 15 points, or 0.3%, and the NASDAQ Composite rose 50 points, or 0.3%.

All three benchmark indices are on course for hefty gains this month, helped by the announcement of a trade agreement between the U.S. and China, lifting hopes that trade agreements could be reached before President Trump’s July 9 deadline.

This was augmented Monday by the news that Canada has rescinded its digital services tax on tech businesses mere hours before it was due to take effect, as Ottawa pushes to revitalize stalled trade negotiations with the Trump administration.

U.S. President Donald Trump used the tax as a motive last week for terminating trade discussions with Canada, but Prime Minister Mark Carney and Trump will now hold talks with the goal of reaching a trade deal by July 21, Canada’s finance ministry said.

Fed to cut by September?

Markets had also advanced last week on rising expectations of a Federal Reserve rate cut, spurred by weaker-than-expected inflation data.

A personal consumption expenditures report showed that consumer spending unexpectedly declined in May, while the inflation rate stubbornly above the Federal Reserve’s 2% target. The figures bolstered hopes for potential interest rate reductions from the central bank.

The removal of the threat of potentially inflationary tariffs could be the final catalyst the U.S. Federal Reserve needs to cut interest rates once more.

Fed Chair Jerome Powell’s testimony to U.S. Congress last week was seen as somewhat dovish after he said rate cuts were likely if inflation did not spike this summer because of tariffs.

Financial markets have now priced in a roughly 74% probability that the Fed will slash rates as soon as its September, although there is still a smaller chance that the next reduction comes at its next gathering in July.

The nonfarm payrolls report for June, due out on Thursday with Friday being a U.S. holiday, is the next major economic data release, with economists anticipating that a total of 120,000 jobs were added during the month, inching down from 139,000 in May.

Trump’s tax cut bill advances in Senate

The Senate on Saturday narrowly approved a 51–49 procedural vote to open debate on Trump’s comprehensive “One Big Beautiful Bill,” combining tax cuts, domestic spending changes, and border security provisions

The bill’s advancement sets up a high-stakes week of legislative maneuvering, beginning with up to 20 hours of debate.

According to a Congressional Budget Office (CBO) estimate, the Senate’s version of the bill would add approximately $3.3 trillion to the federal deficit over the next decade.

Despite Senate Republicans aiming to wrap up the process before the July 4 holiday, the bill faces further hurdles in the House, where members have raised objections to the deficit impact and rushed timeline. 

The Republican-controlled U.S. House of Representatives passed its version of the bill last month.

Oil stable, heads for monthly gain

Crude prices stabilized Monday after an easing of geopolitical risks in the Middle East and the prospect of another OPEC+ output hike in August weighed heavily last week.

At 09:35 ET, Brent futures traded largely flat at $66.78 a barrel and U.S. West Texas Intermediate crude futures fell 0.2% to $65.36 a barrel.

Both benchmarks posted their biggest weekly decline since March 2023 last week, but they are set to finish higher in June with a second consecutive monthly gain of more than 5%.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is set to meet on July 6 and is widely expected to agree to another monthly increase in output levels, the fifth since the group started unwinding production cuts in April.