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Highlights
Canada cancels planned digital services tax, reigniting trade discussions with the U.S.
Meta Platforms (META) and Alphabet (GOOGL) advance during premarket trading
TSX and Wall Street futures gain ahead of key policy bill developments
Equities in the technology sector saw early momentum as futures for key indices pointed upward following Canada's decision to cancel its digital services tax. The TSX Composite Index and NASDAQ both reflected positive sentiment, with futures on both indexes climbing modestly as markets opened. The policy change came hours before the tax was set to take effect, alleviating concerns for companies like Alphabet (TSX:GOOGL), Meta Platforms (TSX:META), and Amazon (TSX:AMZN).
Canada’s move to withdraw the levy renewed optimism over bilateral trade talks with the United States. The digital tax had sparked friction, with U.S. officials halting trade discussions late last week. The return to negotiations has eased tensions and appeared to boost confidence across multiple indices including the TSX Composite and the NASDAQ.
Market Activity Across North America
Futures for Canada's TSX Composite Index moved higher following last week’s modest gain, which had helped reverse earlier losses in the month. The TSX Venture Exchange, representing smaller-cap Canadian equities, ended the previous week in positive territory despite a minor dip on Friday.
On Wall Street, futures linked to the Dow Jones Industrial Average, the S&P 500, and the NASDAQ all recorded early gains. The NASDAQ, where technology stocks like Microsoft (MSFT), Meta Platforms (META), and Alphabet (GOOGL) are heavily weighted, saw a particularly strong reaction. These stocks climbed during premarket hours, with traders digesting the news of the scrapped tax.
The move also comes as major U.S. indices approach the end of a sharply rebounding month. The S&P 500 and NASDAQ reached new highs during the previous session, erasing losses that had accumulated earlier in the year amid tariff-related concerns.
Policy Focus Remains on Legislative Bill
In the United States, attention now turns to a high-stakes legislative proposal widely referred to as the “big, beautiful bill.” The measure cleared a procedural hurdle in the Senate over the weekend and is scheduled for a full vote in the coming days. However, the bill faces an uncertain outlook in the House, where certain lawmakers have voiced concerns over its contents.
The bill, backed by the administration, is seen as a cornerstone of the current economic agenda. Any progress or setbacks in its legislative journey could influence broader market direction, particularly on indexes like the Dow Jones Industrial Average and S&P 500, which include components that may be directly affected by policy changes.
Currency Movement and Broader Sentiment
The Canadian dollar edged higher against the U.S. dollar, supported by easing trade tensions and the anticipation of resumed discussions between top government officials. Broader sentiment across both Canadian and U.S. markets appeared to reflect optimism that diplomatic and economic cooperation could regain momentum.
With the month drawing to a close, market participants are watching closely for signals on trade policy, monetary developments, and fiscal initiatives. Stocks connected to the tech sector, particularly those with international exposure such as Amazon (AMZN), Alphabet (GOOGL), and Meta Platforms (META), continue to show sensitivity to geopolitical news and tax policies.
