S&P 500 Hits Record High Again on Hopes of Global Trade Deals

Market surges as US-Japan agreement boosts confidence in upcoming EU negotiations

Market Rally Driven by Trade Optimism

US stocks soared on Wednesday, with the S&P 500 closing at a new all-time high, fuelled by hopes that recent trade agreements could help avoid further global economic tensions.

• S&P 500 rose by 0.80%
• Dow Jones climbed 507 points, or 1%
• NASDAQ Composite increased by 0.6%

Investors were encouraged after President Donald Trump confirmed a new trade deal with Japan, calming fears of an escalating trade war.

US-Japan Trade Deal Sparks Market Confidence

President Trump announced a “massive” deal with Japan, reducing planned tariffs on Japanese imports from 25% to 15%. The agreement also includes:

• A promise of $550 billion in Japanese investment in the US
• Increased US access to Japanese markets, particularly in autos and agriculture (notably rice)

Trump hinted at more deals on the horizon, including with the EU, ahead of a potential 30% tariff on EU imports due 1 August.

"We have Europe coming in tomorrow, and the next day, we have some other ones coming in," Trump stated, boosting investor sentiment globally.

Earnings Reports in Focus

The market’s upward momentum was further supported by upcoming and positive earnings announcements:

• Tesla: Investors are eyeing its shrinking margins amid sluggish vehicle sales and ongoing price wars in China. Focus remains on AI and robotics innovation as future growth drivers.
• Alphabet (Google): Earnings expected to offer insights into AI-led revenue growth. The company continues to be a major player in AI infrastructure investment.

Corporate Highlights

• AT&T: Shares gained after beating earnings forecasts, adding more phone customers than expected.
• Texas Instruments: Stock dipped following a weak profit outlook due to slowing demand for analogue chips—raising tariff-related concerns.
• Hasbro: Despite strong results powered by its Magic: The Gathering franchise, shares fell slightly.
• GE Vernova: Rose after strong Q2 performance and an upgraded full-year outlook, driven by demand for power and grid infrastructure.
• Hilton Worldwide: Shares declined as revenue per available room slipped 0.5% year-on-year, with reduced occupancy flagged as the cause.

Meme Stocks Make a Comeback

A resurgence in retail investor enthusiasm saw meme stocks rally once again. Among the most notable movers:

• GoPro
• Krispy Kreme
• Rocket Companies
• Opendoor Technologies
• Kohl’s

Outlook: Can the Rally Continue?

While trade optimism and strong earnings have lifted markets, risks remain:

• Uncertainty over tariffs still clouds the outlook, particularly in the EU and China trade fronts.
• Inflation pressures linked to tariffs may resurface, keeping central banks on alert.
• The earnings season will be crucial; so far, 85% of S&P 500 companies that have reported have beaten expectations, but tech sector results could sway sentiment.

Final Thoughts

The US-Japan trade deal has injected much-needed optimism into markets, with the S&P 500 notching a fresh record. Investors are now watching closely as more trade negotiations unfold and major tech firms reveal their performance.

If trade tensions ease and earnings remain strong, this rally could have legs—but caution remains warranted amid geopolitical uncertainty.

Sources: (Investing.com)