Smooth Sailing to Record Highs - Markets Buoyed by Trade Wins & Rate Cut Hopes

U.S. stocks rose to record highs on Friday, capping a remarkable recovery from April's slide, buoyed by optimism over trade deals and rising expectations for interest rate cuts. Israel ended its state of emergency on Tuesday as a ceasefire with Iran took effect. U.S. President Donald Trump declared on Wednesday that the war was "over" and announced U.S.-Iran talks for next week. Over the weekend, Washington helped end the conflict after US forces attacked three Iranian nuclear sites, causing severe damage.

On Thursday Trump announced that the U.S. and China signed a trade agreement earlier in the week. The White House said the two countries agreed on a framework to implement the agreement reached in Geneva in May. China's Ministry of Commerce issued a statement Friday noting that it is reviewing and approving export licenses for rare earths, referencing the Geneva agreement, and further confirmed details of the framework agreed to in June in London.

Speaking on Capitol Hill on Tuesday, Fed Chairman Jerome Powell avoided setting a specific date for a rate cut, but noted that a majority of the Federal Open Market Committee (FOMC) envisions rate cuts later this year, and that an early cut could be brought forward if the decline in inflation continues or the labor market weakens. Prior to Powell's testimony, Trump launched another broad criticism of the Fed, pressuring the central bank to lower rates.

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