US STOCKS-S&P 500, Nasdaq at record highs as trade hopes feed quarterly momentum

By Sabrina Valle, Sruthi Shankar

NEW YORK, June 30 (Reuters) - The S&P 500 and Nasdaq edged up to record highs on Monday and were set to close their best quarter in over a year, rebounding sharply from April lows as hopes for trade deals and possible rate cuts ease investor uncertainty.

The S&P 500 has gained over 10% for the quarter, the Nasdaq rose more than 17%, and the Dow has climbed over 4.5%. The Russell 2000 Small Cap index was last up over 8% for the quarter.

For the first half, however, the three main indexes were set for their weakest performances since 2022.

Trade deals with China and the UK have fueled optimism that an all-out global trade war can be avoided, with hopes for more deals to be reached before President Donald Trump’s July 9 trade deadline.

"Animal spirits seem to have taken hold here," said Roy Behren, co-president of Westchester Capital management fund. "It is also quite common for the last couple days of a quarter to see strength because of the window dressing."

At 2:05 p.m. EDT, the Dow Jones Industrial Average .DJI rose 144.11 points, or 0.33%, to 43,963.38, the S&P 500 .SPX gained 11.89 points, or 0.19%, to 6,184.96 and the Nasdaq Composite .IXIC gained 42.26 points, or 0.21%, to 20,316.28.

On Sunday, Canada scrapped its digital services tax targeting U.S. tech firms, just hours before it was due to take effect, in a bid to advance stalled trade negotiations with the United States.

But U.S. Treasury Secretary Scott Bessent warned on Monday that countries could still face sharply higher tariffs on July 9 even if they are negotiating in good faith, and any potential extensions will be up to Trump.

Meanwhile, U.S. Senate Republicans will try to pass Trump's sweeping tax-cut and spending bill, despite divisions within the party about its expected $3.3 trillion hit to the $36.2 trillion national debt. Trump wants the bill passed before the July 4 Independence Day holiday.

Key economic data releases this week include monthly non-farm payrolls and the Institute for Supply Management's survey on manufacturing and services sectors for June.

Several U.S. central bank officials including Federal Reserve Chair Jerome Powell are scheduled to speak later this week.

A raft of soft economic data and expectations that Trump will replace Powell with someone dovish have pushed up bets of rate cuts from the Fed this year.

Shares of big U.S. banks rose after most cleared the Federal Reserve's annual "stress test," paving the way for billions in stock buybacks and dividends.

Shares of Bank of America BAC.N dipped 0.2%, while rivals JPMorgan Chase JPM.N and Wells Fargo WFC.N added 0.9% and 0.7%, respectively.

Juniper Networks JNPR.N rose 8.4% after the U.S. Justice Department settled its lawsuit challenging server maker Hewlett Packard Enterprise's HPE.N all-cash acquisition of the networking gear maker for $14 billion.

Hewlett Packard Enterprise shares surged 11.6%.

Shares of Oracle ORCL.N rose 4.3% after the company said a new cloud services agreement is expected to contribute more than $30 billion to annual revenue starting in fiscal year 2028.