Markets soar: S&P 500 hits new record on earnings optimism
The US stock market ended Tuesday at a record high, with the S&P 500 reaching a new all-time peak. Investors closely monitored earnings from key corporations and tried to gauge the future direction of US-China trade negotiations.
Auto industry hit hard: GM slips sharply General Motors shares plunged 8.1% after reporting a $1 billion hit to profits due to higher tariffs. This reignited concerns over the consequences of the White House's protectionist stance. Ford also came under pressure, with its stock falling about 1%.
Tesla holds steady ahead of report Tesla shares gained 1.1% ahead of its quarterly results. Alphabet, also set to report, rose 0.65%.
Investors bet on Artificial Intelligence Expectations of massive AI investments boosted the most expensive and promising tech stocks, helping drive the S&P 500's latest surge.
Tech sector mixed despite optimism Despite overall enthusiasm, some major tech stocks slipped. Microsoft and Meta (banned in Russia) both dropped about 1%.
Defense sector under pressure RTX shares dropped 1.6% amid trade tension concerns, despite strong demand for aircraft engines and maintenance. Lockheed Martin suffered an even steeper fall: quarterly profits plummeted nearly 80%, and the stock sank nearly 11%.
Trade uncertainty mounts: investors await Washington's next move Global markets remain weighed down by the lack of clarity on US trade policy. With Trump's administration setting an August 1 deadline for deals with several countries, investors are increasingly uneasy as details remain scarce.
US–China: another meeting, another delay? Treasury Secretary Scott Bessent announced plans to meet his Chinese counterpart next week. The key topic: a potential delay in the introduction of new tariffs on Chinese imports, currently slated for August 12. Pressure is rising on both sides.
Talks with India stall, EU considers response While there is still hope for an extension with China, negotiations with other partners appear deadlocked. Optimism over an India deal is fading fast. Meanwhile, the EU is actively considering retaliatory measures against the US.
Markets brace: modest S&P gains, mixed index performance The US stock market closed with slight changes. The S&P 500 rose 0.06% to 6309.62. Nasdaq fell 0.39% to 20892.69, while the Dow Jones climbed 0.40% to 44502.44.
Health care and real estate lead gains Out of the 11 S&P 500 sectors, nine ended in positive territory. Health care led the way with a 1.9% gain, followed by real estate, up 1.78%.
Trading volume above average Investor activity was strong: 18.8 billion shares were traded, above the 20-day average of 17.7 billion.
Philip Morris takes a hit: ZYN disappoints Shares of tobacco giant Philip Morris dropped 8.43% after a disappointing earnings report. Revenue missed forecasts, especially due to weaker-than-expected sales of nicotine pouches (ZYN), previously seen as a major growth driver.
S&P 500 earnings focus: tech at the core Experts predict strong Q2 earnings for S&P 500 companies. Analysts from LSEG I/B/E/S project average earnings growth of around 7%, largely driven by leading tech firms.
Japan surges on US trade breakthrough Japan's stock market hit a one-year high Wednesday, buoyed by a new trade deal with the US that reduces tariffs on Japanese car exports. The news lifted investor sentiment in Asia and raised hopes for a similar deal with the EU, supporting gains in European futures.
Trump reveals details: better terms than expected President Trump announced the new agreement includes a 15% car import tariff—lower than the previously discussed 25%. The statement followed a separate deal with the Philippines involving a 19% import duty.
Europe prepares for talks: hopes for compromise rise Trump also revealed an EU delegation would arrive in the US on Wednesday for trade negotiations. The announcement rekindled hopes of a deal despite Brussels simultaneously preparing countermeasures for a failed outcome by the August 1 deadline.
European futures rise EUROSTOXX 50 futures rose 1.3%, and Germany's DAX gained 0.6%, driven by the trade agenda and de-escalation hopes.
Nikkei rallies sharply Japan's Nikkei index surged 3.7%, led by carmakers encouraged by news of tariff cuts from a projected 25% to 15%. Mazda shares jumped 17%, while Toyota gained 13.6%.
South Korea's auto sector climbs amid trade optimism Shares of major South Korean automakers rose strongly on hopes that the US–Japan deal could pave the way for progress in US–South Korea trade talks.
Japan's economy gets breathing room Analysts say the US deal helped reduce key trade risks for Japan's economy, giving the Bank of Japan more leeway to tackle inflation possibly via interest rate hikes.
Yen loses ground, Dollar strengthens Initial gains in the yen from trade news proved short-lived. Political uncertainty gave the US dollar the upper hand again, pushing it up 0.2% to 146.95.
US–China talks set to resume Another bright spot: US and Chinese officials are expected to meet in Stockholm. Treasury Secretary Bessent confirmed talks may delay the August 12 tariff deadline.
China and regional markets gain ground China's large-cap index rose 0.7%, and Hong Kong's Hang Seng climbed 0.8%. The MSCI Asia-Pacific ex-Japan index gained 1%.
Euro slips, ECB decision awaited The euro edged down 0.1% to $1.1737 as markets expect the ECB to keep rates unchanged at the next meeting following eight consecutive cuts. The uncertainty stems from potential new US tariffs.
US bond yields rise again US 10-year Treasury yields rose two basis points to 4.36%, after dropping three points the previous day.
Gold dips slightly Spot gold prices fell modestly to $3,422 per ounce, as traders monitored the dollar and inflation expectations.
Oil prices rise on diesel spike Oil prices rose on a sharp increase in US diesel prices, with inventories at their lowest for this season since 1996. WTI crude gained 0.4% to $65.60 a barrel. Brent also rose 0.4% to $68.88 a barrel.
