Canada Cancels Digital Tax, U.S. Stocks Rise 0.5%

On the morning of June 30, U.S. stocks saw a slight uptick, with market sentiment buoyed by developments in international trade relations. Canada's decision to cancel its digital services tax and resume trade talks with the U.S. provided a positive catalyst for investors. Meanwhile, the U.S. Senate is poised to vote on a significant tax reform bill proposed by the Trump administration.

Canada's move to cancel the digital services tax, which was set to take effect on June 30, is seen as a response to pressure from the U.S. The tax was intended to apply to major tech companies such as Microsoft, Google, Meta Platforms, and Amazon. The cancellation comes as a relief to these companies, which had been bracing for the financial impact of the new tax. The U.S. Treasury Secretary has indicated that negotiations on reciprocal tariffs are ongoing, and that further tariff increases could be on the table if countries remain inflexible.

In the U.S., the Senate is set to vote on a comprehensive tax reform bill proposed by the Trump administration. The bill, which aims to reduce taxes and increase government spending, has faced opposition from some Republican senators. The Senate Majority Leader is working to address these concerns and secure enough votes to pass the bill before the July 4 deadline set by the president. The bill, if passed, would increase the U.S. deficit by nearly 3.3 trillion dollars over the next decade, according to the Congressional Budget Office. The House of Representatives will also need to vote on the bill before it can be signed into law by the president.

Investors are closely monitoring the progress of the tax reform bill, as its passage could have significant implications for the U.S. economy and financial markets. The bill's potential impact on corporate taxes and government spending could influence stock prices and market sentiment in the coming weeks. Additionally, the ongoing trade negotiations with Canada and other major partners could further shape market dynamics and investor sentiment.