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Indexes up: Dow 0.93%, S&P 500 0.58%, Nasdaq 0.54%

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Indexes set for weekly gains

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Nike ( NKE ) rises after better-than-expected Q1 revenue forecast

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Washington, Beijing in deal to speed rare earth shipments

to US

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Trump cancels trade talks with Canada over digital tax

(Updates to afternoon)

By Stephen Culp

NEW YORK, June 27 (Reuters) - Wall Street extended its

rally on Friday, setting the S&P 500 and Nasdaq on course for

record closing highs as trade deal hopes fueled investor risk

appetite and economic data helped solidify expectations for rate

cuts from the U.S. Federal Reserve.

All three major U.S. stock indexes advanced and were poised

for weekly gains. The S&P 500 and the Nasdaq breezed past

previous intraday record highs and headed toward all-time

closing highs. The blue-chip Dow remained 2.9% below its record

closing high reached on December 4.

"Given the uncertainties in the world at the moment, I am

surprised," said Peter Tuz, president of Chase Investment

Counsel in Charlottesville, Virginia. "However, one can make the

case that the uncertainties are diminishing as the year

progresses and that has made people more optimistic about the

future."

"Inflation (is) under control, (it) doesn't seem like the

tariffs have pushed anything up yet," Tuz continued. "The

economy is OK. Seems like there is plenty of money out there to

buy things. So why not make an all-time high?"

The Personal Consumption Expenditures report from the

Commerce Department showed consumer income and spending

unexpectedly contracted in May. And while tariffs have yet to

affect price growth, inflation continues to hover above the

Fed's 2% annual inflation target.

A separate report from the University of Michigan confirmed

consumer sentiment has improved this month, but remains well

below December's post-election bounce.

Financial markets have priced in a 72% likelihood that the

Fed will implement its first rate cut of the year in September,

with a smaller, 21% probability of a rate cut coming as soon as

July, according to CME's FedWatch tool.

Washington and Beijing reached an agreement to expedite

rare-earth shipments to the U.S., a White House official said,

well ahead of the July 9 expiration of the 90-day postponement

of U.S. President Donald Trump's "reciprocal" tariffs.

Additionally, U.S. Treasury Secretary Scott Bessent said the

Trump administration's trade deals with 18 of the main U.S.

trading partners could be done by the September 1 Labor Day

holiday.

On a less positive note, Trump ended trade negotiations with

Canada in response to its imposition of a digital services tax

on technology companies.

The Dow Jones Industrial Average rose 329.28 points,

or 0.76%, to 43,716.12, the S&P 500 gained 18.12 points,

or 0.30%, to 6,159.14 and the Nasdaq Composite

gained 36.57 points, or 0.18%, to 20,204.48.

Among the 11 major sectors of the S&P 500 Industrials

were enjoying the biggest percentage gain, while

energy shares were the laggards.

Chipmaker Micron's MU.O upbeat forecast revived investor

confidence in artificial intelligence-related stocks, while

Nvidia NVDA.O rose 1.4%, edging closer to $4 trillion market

capitalization after reclaiming its position as the world's most

valuable company.

Nike's ( NKE ) shares NKE.N jumped 15.2% after forecasting a

smaller-than-expected drop in first-quarter revenue.

Advancing issues outnumbered decliners by a 1.33-to-1 ratio

on the NYSE. There were 318 new highs and 42 new lows on the

NYSE.

On the Nasdaq, 2,084 stocks rose and 2,314 fell as declining

issues outnumbered advancers by a 1.11-to-1 ratio.

The S&P 500 posted 34 new 52-week highs and 3 new lows while

the Nasdaq Composite recorded 89 new highs and 50 new lows.