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23.07.2025 09:22 AM
The S&P 500 closed at an all-time high on Tuesday, as investors digested fresh corporate earnings and looked ahead to upcoming reports, while closely monitoring developments in US-China trade relations.
Shares of General Motors plunged 8.1 percent after the automaker revealed a billion-dollar drop in quarterly earnings, attributing the loss to increased tariffs. This reignited market concerns over President Trump's aggressive trade policies. Ford shares also declined, slipping about one percent.
Tesla shares edged up by 1.1 percent just ahead of its scheduled earnings release. Alphabet stock also ticked up 0.65 percent in anticipation of its quarterly report.
Rising investor confidence in artificial intelligence continues to boost the stock prices of Wall Street's most valuable companies, helping push the S&P 500 toward record territory.
While some tech giants saw gains, others moved in the opposite direction. Shares of Meta (banned in Russia) and Microsoft each declined by around one percent, dampening broader sector performance.
Shares in RTX fell 1.6 percent, despite strong demand for its jet engines and aftermarket services, as the firm felt the ripple effects of trade disputes. Lockheed Martin suffered a more severe blow — the company's quarterly profit dropped by nearly 80 percent, triggering an 11 percent fall in its stock price.
Investors and companies are increasingly unsettled by the evolving US trade agenda, especially as the deadline set by former President Trump for striking deals with several key countries draws closer. The pivotal date of August 1 is approaching rapidly, but significant progress remains elusive.
US Treasury Secretary Scott Bessent announced plans to meet with his Chinese counterpart next week. At the center of their discussion will be whether to push back the August 12 deadline for imposing new tariffs on Chinese goods. Both sides are under growing pressure to find common ground.
While a potential extension with China remains on the table, other trade discussions appear to have hit a wall. Hopes for a breakthrough agreement with India are fading, and officials in the European Union are reportedly considering countermeasures against US policies.
US stock indexes ended the session with mixed results. The S&P 500 edged higher by 0.06 percent to close at 6309.62. The Nasdaq fell by 0.39 percent, finishing at 20892.69, while the Dow Jones Industrial Average rose 0.40 percent to 44502.44.
Of the 11 primary sectors tracked within the S&P 500, nine ended the day in positive territory. Healthcare stocks led the way with a 1.9 percent gain, followed closely by real estate, which climbed 1.78 percent.
Market activity remained brisk, with trading volumes reaching 18.8 billion shares — significantly above the 20-session average of 17.7 billion.
Shares of Philip Morris fell sharply, down 8.43 percent, after the company reported weaker-than-expected revenue for the second quarter. Investor disappointment was driven largely by underwhelming performance in sales of ZYN nicotine pouches, a product line that had been seen as a growth driver.
Analysts surveyed by LSEG I/B/E/S anticipate that companies within the S&P 500 will post an average earnings increase of seven percent for the second quarter. The bulk of this growth is expected to come from major players in the technology sector, underscoring their dominant role in driving market performance.
Japanese stocks rallied on Wednesday, reaching their highest level in a year, after a trade pact with the United States was announced. The agreement includes reduced tariffs on Japanese vehicle exports, sparking optimism not only in Tokyo but also across European markets, where hopes were renewed for a US-EU trade resolution.
US President Donald Trump stated that the trade agreement with Japan will impose a 15 percent tariff on Japanese car imports, notably lower than the initially proposed 25 percent. This announcement followed a separate deal with the Philippines, under which imports to the US will face a 19 percent tariff.
Trump also confirmed that a European Union delegation is set to arrive in Washington on Wednesday for fresh negotiations. Although Brussels is reportedly preparing countermeasures in case of a stalemate, the talks have sparked renewed market optimism for a breakthrough before the looming August 1 deadline.
The EUROSTOXX 50 futures climbed by 1.3 percent, while Germany's DAX futures advanced 0.6 percent, both buoyed by hopes of easing trade tensions between the US and its global partners.
Japan's Nikkei index surged 3.7 percent, with auto stocks leading the charge. Investor enthusiasm was fueled by news that US tariffs on Japanese cars will be reduced from a proposed 25 percent to 15 percent. Shares in Mazda soared 17 percent, while Toyota gained 13.6 percent.
Shares of South Korean automakers moved higher as investor sentiment improved, following a trade agreement between the United States and Japan. The deal has fueled optimism that Washington and Seoul may also find common ground on tariffs in the near future.
Analysts say the trade pact with the US has reduced some of the pressure on Japan's fragile economy. The move gives the Bank of Japan greater flexibility to consider rate hikes in its fight against inflation.
Early strength in the yen, driven by news of the trade talks, faded as political uncertainty weighed on investor confidence. The dollar firmed by 0.2 percent, reaching 146.95.
In another encouraging development, US and Chinese officials are set to meet in Stockholm next week. According to Treasury Secretary Scott Bessent, the discussions will focus on the possibility of extending the August 12 deadline for reaching a trade agreement.
China's blue-chip index rose 0.7 percent, while Hong Kong's Hang Seng added 0.8 percent. The MSCI index tracking Asia-Pacific equities outside Japan climbed 1 percent, reflecting growing investor confidence in the region.
The euro edged down 0.1 percent to 1.1737 dollars, following a 0.5 percent rise the previous day. The market anticipates that the European Central Bank will keep rates steady on Thursday after eight consecutive cuts, amid concerns about potential new US tariffs.
Yields on 10-year US Treasury notes ticked up by two basis points to 4.36 percent, reversing the previous day's three-point decline, as markets digested fresh inflation data and Fed expectations.
Spot gold prices eased to 3422 dollars per ounce, reflecting a mild pullback as the US dollar strengthened and investors awaited further economic signals.
Crude prices climbed as the US diesel market tightened sharply. Inventories are now at their lowest seasonal level since 1996. West Texas Intermediate rose 0.4 percent to 65.60 dollars per barrel, while Brent advanced by the same margin to 68.88 dollars.
