U.S. stock market hits $63.8 trillion, double what it was in 2020

The U.S. stock market just broke through $63.8 trillion in public equity value, according to Goldman Sachs. That number is twice the size it was five years ago.

In 2020, the entire public market sat at around $31 trillion. The last time it doubled, it took eight years. This time, it did it in five. And it’s not even close to the rest of the world. 

The U.S. market is now over three times larger than Europe’s and bigger than the combined market sizes of Europe, China, Hong Kong, Japan, and India.

The jump in total market size follows a strong finish to the quarter. On Monday, the S&P 500 closed at another all-time high after gaining 0.52%. The Nasdaq Composite, led by tech stocks, added 0.47%, also hitting a record. 

The Dow Jones Industrial Average rose 275.50 points, or 0.63%, pulling the entire equities space higher. But when trading opened Tuesday, futures pulled back. The Dow dropped 32 points, or 0.07%, while S&P 500 futures fell 0.15% and Nasdaq 100 futures slid 0.22%.

Trump hits pause on Canada trade talks after tax rollback

On the policy side, movement between Washington and Ottawa created tension early this week. Canada reversed its digital services tax in an effort to ease trade talks with the U.S. That came days after President Donald Trump said on Friday he would be “terminating ALL discussions on Trade with Canada.”

The Canadian government made the decision to pull back on the levy to keep talks from collapsing entirely. Trump’s 90-day tariff reprieve is running out next week, and traders are watching closely for any sign of what comes next.

Markets are still recovering from April, when Trump’s sweeping tariffs knocked the S&P 500 close to bear market territory. Since then, the rebound has been aggressive. The broad market index posted a 10.6% gain for the second quarter, while the Nasdaq jumped nearly 18% in the same period.

Despite the pullback in futures, many traders believe momentum could carry into the second half of the year. Mike Wilson, the chief U.S. equity strategist and CIO at Morgan Stanley, told CNBC’s “Closing Bell” on Monday, “We think this is going to be a broader recovery.”

He added, “I think with the Fed cutting in the second half of this year or next year, we can see a rolling recovery – because now there’s quite a bit of pent-up demand, particularly in those interest rate sensitive parts of the market.” Wilson pointed to manufacturing and housing as the sectors that could benefit the most from a potential Fed pivot.

Goldman expects rate cuts to come earlier

Goldman Sachs now expects the Federal Reserve to start cutting rates in September, moving up its forecast from December.

David Mericle, the firm’s chief U.S. economist, wrote in a note Monday that “the very early evidence suggests that the tariff effects look a bit smaller than we expected, other disinflationary forces have been stronger, and we suspect that the Fed leadership shares our view that tariffs will only have a one-time price level effect.”

Even with inflation looking tamer, Mericle said it’s now harder for people to find jobs. He wrote, “Both residual seasonality and immigration policy changes pose near-term downside risk to payrolls.”

Goldman is now predicting three rate cuts this year—September, October, and December—each by 25 basis points. That would push the Fed’s target range down to 3%–3.25%, from the earlier prediction of 3.5%–3.75%. The bank is also projecting two more cuts in 2026.

For now, the Fed’s target range stands at 4.25% to 4.5%. Traders are closely watching the upcoming reports for hints on how the economy is holding up. That includes the S&P Global PMI at 9:45 a.m. ET, followed by the ISM manufacturing report at 10 a.m.

The Job Openings and Labor Turnover Survey (JOLTS) is also set to release Tuesday morning. All three reports are expected to influence market expectations around hiring and production.

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