Investor sentiment received a boost as President Claudia Sheinbaum announced a one-month delay in US tariffs against Mexico, shifting focus to Canada for potential trade resolutions. This development has encouraged investors to reallocate funds into equities, with the expectation that stocks could continue to rise if Canada follows suit. The delay in tariffs is seen as a positive step towards reducing trade tensions, which could enhance corporate profits and stimulate economic growth.
The SPDR S&P 500 ETF (SPY) and e-mini S&P 500 futures experienced a surge in trading volumes following the announcement, signaling strong investor confidence and liquidity in the market. High trading volumes are often viewed by technical analysts as a precursor to sustained price movements, suggesting that the current rally in stock prices may persist with further positive trade news.
The S&P 500 Index is currently at 5,991.65 as of 12:12 on February 3, reflecting a slight decline from its last close of 6,040.53. Despite the dip, the market remains optimistic about potential trade agreements, particularly with Canada, which could further bolster stock prices.