U.S.-Canada Trade Dispute and Inflation Data Overshadow ETF Gains

The S&P 500 ETF (SPY) and Nasdaq 100 ETF (QQQ) briefly touched intraday record highs before paring gains after President TRUMP abruptly terminated trade talks with Canada. The rupture follows Ottawa's imposition of a 3% digital services tax targeting U.S. tech firms with over C$20 million in Canadian revenue.

Market momentum faltered as Trump threatened retaliatory tariffs within seven days via Truth Social. Simultaneously, the administration ruled out lifting Iranian sanctions after Supreme Leader Khamenei framed recent nuclear facility strikes as an American humiliation.

Investors digested these geopolitical crosscurrents alongside fresh inflation signals. The Core PCE index—the Fed's preferred gauge—rose 0.2% monthly and 2.7% annually, maintaining pressure on monetary policy.