S&P 500 Sets New Record High as Trade Optimism and Dip-Buying Fuel Rally

The S&P 500 notched a fresh all-time high today, both on an intraday and closing basis, as investors responded positively to a mix of upbeat trade headlines, corporate earnings, and renewed buying momentum in the final hour of trading.

The session began with strong upward momentum after reports confirmed that the U.S. and China had finalized a new trade framework agreement, aimed at increasing Chinese exports of rare earth minerals and easing restrictions on American technology exports to China. Additionally, speculation swirled that the U.S. may soon announce up to ten new trade deals, further fueling bullish sentiment.

This optimism briefly overshadowed a mixed May personal income and spending report, which showed soft income and spending growth but rising inflation. Both the headline and core PCE Price Index readings ticked higher year-over-year, stoking light stagflation concerns. Still, the market largely looked past the data, instead focusing on trend momentum and a standout earnings-driven gain in Nike, which soared 15.2% after delivering stronger-than-expected quarterly results.

By midday, mega-cap strength had pushed the S&P 500 to a session high of 6,187.68, up 0.8%, but the rally was abruptly interrupted. In an afternoon post on Truth Social, President Trump announced the U.S. would terminate trade talks with Canada, citing what he called a 400% tariff on U.S. dairy and a digital services tax. He warned that Canada would soon be notified of new tariffs for doing business with the U.S.

This update triggered a sharp but brief market-wide selloff, with concerns resurfacing around tariff inflation and potential global retaliation, especially with the expiration of the current tariff moratorium looming on July 9. The bond market echoed those fears, as the 10-year Treasury yield rose from 4.24% to 4.29%.

However, in a display of classic dip-buying behavior, the market rebounded in the final hour of trade. The S&P 500 climbed from 6,132.35 to a closing level of 6,173.07, setting a new record closing high.

The recovery was broad-based. Nine of the 11 S&P 500 sectors finished the day higher, led by consumer discretionary (+1.8%), communication services (+1.5%), and industrials (+1.0%). Only health care (-0.2%) and energy (-0.5%) closed in the red.

Meanwhile, in Washington, attention remained fixed on Senate negotiations surrounding the sweeping “One Big, Beautiful Bill.” Bloomberg reported that Senate Republicans reached a deal to raise the SALT deduction cap to $40,000 for five years. However, questions remain about whether enough House GOP members will support the agreement. CNBC added that a Senate vote is possible this weekend, and Treasury Secretary Bessent expressed confidence in an interview that the bill could reach the president’s desk by July 4.

Our portfolio, FTinvest 11, experienced a volatile trading session alongside the broader market. The index opened with strong momentum, rising as much as 1.1% in early trading. However, that strength faded quickly as broad market pullbacks took hold, dragging the index back down to the flatline.

Despite the midday retreat, FTinvest 11 managed to recover in the final stretch of the session. Thanks to renewed buying interest late in the day, the portfolio closed with a 0.55% gain at 769.22.