Tech Stocks to Receive a Boost after Canada-U.S. Deal
Nasdaq set a record high last week and is set to keep on climbing after good news for the tech market from Canada.
Quick overview
- The stock market reached all-time highs on Friday, with the S&P 500 and Nasdaq Composite setting new records.
- A deal between the U.S. and Canada to remove Canada's digital services tax is expected to boost stock values, particularly for tech giants.
- Despite a two-month rally, investors should be cautious of potential pullbacks as the market may not continue to rise without interruption.
- Tech stocks, especially Microsoft and Tesla, are poised for growth, with Tesla focusing on driverless technology and AI development.
The stock market hit some all-time highs on Friday as the S&P 500 set a new record as did the Nasdaq Composite, and the market is likely to climb from here.
The United States and Canada reached a deal for Canada to remove its digital services tax, which takes pressure off of Google, Amazon, Meta, and other tech giants. This decision comes after lengthy negotiating between the two countries and should pave the way for higher stock values on the Nasdaq Composite. That index reached an all-time high on Friday.
The Nasdaq climbed 0.52% on Friday and should keep climbing as the week of trading begins. With conflict between Israel and Iran on pause for the moment and tariffs held back by Donald Trump, the stock indices have room to grow rapidly. The overall stock market is on a two-month rally now, having climbed out of its April lows, but there is potential risk in that kind of rapid ascent.
What Investors Need to Watch for
We may see some pullback from the market this week as it retreats from its recent highs. Several factors are working in favor of higher stock prices, but investors should not expect the market to simply keep on climbing unabated.
Microsoft (MSFT), which was slightly down on Friday after falling from incredible gains is now up during early Monday trading. Gaining 0.29%, Microsoft has regained much for its recently lost ground and is set to keep hitting record highs for now. The news of the Canada-U.S> dela should help propel the stock further, despite some indications that the company may be making cuts to its gaming division.
Tesla (TSLA) also has the potential to turn things around for its falling stock as it focuses on driverless technology and AI development. The company recently launched its driverless taxi service in Austin, Texas and plans to make this service available in other cities soon. The company celebrated the first auto delivery of a vehicle to a customer’s house this week. In addition, Tesla may be looking to release their Optimus humanoid robots in late 2025 or early 2026, which CEO Elon Musk said would target a $30,000 price point.
Watch tech stocks especially this week and the Nasdaq Composite where most of the trading action is bound to be. These stocks could further benefit from discussion that the Trump tariffs may be put on pause for even longer than the previously approved 90-day period.
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