S&P 500 closes at record high for second day in a row

US proposes tariffs on EU goods

By Anneken Tappe, CNN Business
Drew Angerer/Getty Images

(CNN) - The S&P 500 closed at an all-time high for the second day in a row on Tuesday.

Stocks climbed higher in the last minutes of trading following a relatively quiet day as the initial optimism over the tariff ceasefire between the United States and China waned.

The S&P 500 closed 0.3% higher at 2,973 points, its highest level ever, surpassing the record it set on Monday.

The Dow finished 0.3%, or 69 points, up. It is only 0.2% away from the record high it set in October, according to Refinitiv.

The Nasdaq Composite closed 0.2% higher.

Although investors were upbeat at the start of the week after President Donald Trump and China's Xi Jinping agreed a tariff ceasefire to return to trade talks, underlying worries about the global economy persist. After all, the agreement struck at the G20 summit in Japan didn't cancel any existing tariffs that are already affecting the global economy.

The United States proposed new tariffs on $4 billion worth of goods imported from the European Union. The newly proposed tariffs promise to add to the pain, as the EU economy is heavily driven by exports.

In line with that narrative, the theme of global monetary easing is continuing. The Reserve Bank of Australia cut interest rates to a record low of 1% to stimulate the economy.

"This was the second rate cut in succession, by the Australian central bank and feeds into a global narrative of central banks looking set to embark on a new easing cycle, over concerns that the global economy is on the cusp of a sharp slowdown," said Michael Hewson, chief market analyst at CMC Markets.

Just a year ago, developed world central banks were generally still leaning towards raising rates.

Trump has long called on the Federal Reserve to also cut interest rates to boost the economy. Market expectations for a cut later this month are at 100%.

Nevertheless, Trump tweeted earlier on Tuesday that the economy was the "best it has ever been".

Worries about global growth and by extension global energy demand also weighed on oil prices on Tuesday.

US oil settled 4.8% lower at $56.25 a barrel, according to CME. The newly announced extended production cuts from OPEC may not have been enough to calm these worries.

This is a shortened trading week in the United States. The stock market closes at 1 p.m. ET on Wednesday, and it is closed for Independence Day on Thursday.

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