S&P 500 index futures rose by 0.46% to
6,196 points on Monday, breaking above the key resistance range of 6,150–6,170
and setting a new all-time high at 6,203. With momentum building, the benchmark
is now targeting the next short-term resistance at 6,250–6,270, edging closer
to the extreme upside zone of 6,350–6,430 points.
Market sentiment is being fuelled by
expectations around U.S. fiscal policy. President Donald Trump is pushing his
so-called “Big Beautiful Bill,” which proposes to extend the tax cuts introduced
during his first term and add new ones, while simultaneously raising the
national debt ceiling by $4 trillion. According to the Congressional Budget
Office, the proposed package would add $3.3 trillion to the federal deficit
over the next decade — raising concerns about the sustainability of U.S. debt
and the potential for sovereign credit downgrades. Nevertheless, the promise of
lower corporate taxes is overshadowing those concerns in the near term,
supporting equities. The bill is expected to reach the House by July 4,
following a Senate vote. Trump’s aggressive push also underscores his focus on
influencing the Federal Reserve’s future path — as high borrowing costs could
undermine the very tax cuts he’s championing. This dynamic is weighing on the
U.S. Dollar, which may remain under pressure if concerns around fiscal
sustainability intensify.
On the international front, U.S.-Canada trade
tensions are resurfacing. Trump criticised Canada’s Digital Services Tax,
implemented as of June 30, prompting Ottawa to scrap the measure in an effort
to restore trade talks. While not a dominant market mover, the development adds
to uncertainty around U.S. trade policy.
Meanwhile, Federal Reserve Chair Jerome Powell
is set to testify before Congress on July 1. With the June labour market report
likely already in hand, his tone will be closely scrutinised. Unemployment is
expected to edge up to 4.3% from 4.2%, and if confirmed, could tilt the Fed
toward a rate cut as early as July. PMI figures are expected to show resilience,
while ADP private payrolls are forecast to jump to 105,000 from 37,000 —
pointing to mixed signals ahead of the official Nonfarm Payrolls report due
July 3, a release likely to bring heightened volatility. Large investors are
clearly positioning for further gains. The SPDR S&P 500 ETF Trust (SPY)
posted net inflows of $9.98 billion last week, a strong signal that
institutional players are targeting a move toward the 6,350–6,450 range.
The S&P 500 has successfully cleared the
6,050 resistance level, improving its technical structure. Current support lies
at 6,150–6,170, with immediate resistance ahead at 6,250–6,270. A breakout
there would clear the path toward 6,350–6,430. However, the risk of a sharp
pullback remains high once these extreme targets are reached.
Brent crude remains technically fragile.
Prices are testing support at $67.00–69.00 per barrel. If this zone holds, a
rebound toward $76.00–78.00 is likely. A break below $67.00, however, could
extend losses toward $57.00–59.00. Gold continues to slide, now at $3,287 per
troy ounce, after breaking below $3,330–3,350 support. The next key level is
$3,230–3,250. A daily close beneath that could open the door to a deeper
decline toward $3,030–3,050.
The U.S. Dollar remains under pressure. While
improved U.S.-China trade relations would typically lend support, persistent
criticism of Fed policy by President Trump is offsetting the gains. EURUSD has
decisively broken out of its primary uptrend range of 1.14500–1.15500 and is
approaching the 1.18000–1.19000 zone, currently trading at 1.17230. While
technically bullish, entering at current levels involves elevated risk given
the steep run-up.