Market Performance Overview
- All three major indices posted significant gains today. This was driven by positive trade news from Japan. The S&P 500 index jumped 0.78%. It closed at a new record high of 6,358.91. This brings the 6,500 level within sight.
- The Nasdaq also rose 0.61%. It gained 127 points to 21,202.02. The Dow Jones advanced 1.14%. It closed at 45,100.29. This marks a return to the 45,000 level. It has been a long time coming. Small-cap stocks showed great strength. The Russell 2000 soared 1.54%.
- The VIX volatility index fell sharply. It dropped 6% to 15.37. The 10-year Treasury yield rose slightly. It climbed 5 basis points to 4.386%. This followed a 20-year bond auction. The Dollar Index fell 0.17%. It closed at 97.23. The Japanese yen is now trading at 146.
- Gold prices fell 1.32%. It is now around $3,398.4 per troy ounce. Oil prices were nearly flat. They remained around the $65 a barrel level.
- The cryptocurrency market took a pause. Bitcoin fell about 1% to $118,000. Ethereum dropped 2% to around $3,500. Ripple and Solana also fell 9% and 5%, respectively.
Key Macro and Political Drivers
A positive trade agreement with Japan lifted market sentiment. The US and Japan settled on a 15% tariff. Japan will invest approximately $550 billion in US projects. It will also open its agricultural markets. US automakers also rallied nearly 10%. Toyota and Honda ADRs surged 13% and 12%, respectively.
Negotiations with the EU and China are still ongoing. The EU deal faces challenges. It requires consensus from 27 nations. China talks were described as in a “state of balance.” The US may impose a 30% tariff on the EU if a deal is not reached. The US is also pressuring Europe on Russia sanctions. This is seen as a negotiation tactic.
The US housing market shows mixed signals. Existing home prices reached a record high of $435,300. However, sales volume fell 2.7%. This indicates continued market struggles.
A recent bond auction saw strong demand. This suggests stability in bond yields. Expectations for a dovish Fed Chair are rising. The likelihood of a September rate cut is now 60%.
Corporate Earnings and Sector News
- Alphabet (GOOGL) announced strong Q2 results. Revenue grew 14% to $96.43 billion. This beat analyst expectations. EPS was also a beat. The company will increase its annual capital expenditure. It will rise to $85 billion for AI investments.
- Tesla (TSLA) reported disappointing Q2 results. Revenue fell 12% to $22.5 billion. This missed consensus estimates. EPS was down 23%. Vehicle sales declined 16%. FSD approval is still pending in Europe and China.
- T-Mobile (TMUS) had a very strong quarter. It added 1.73 million postpaid subscribers. This set a new record for Q2. The stock is up 4.8% after hours.
- Texas Instruments (TXN) plunged 13%. This was its biggest drop in 17 years. The company’s CFO warned of weak demand. He cited caution on sales to China.
- GE Vernova (GEV) surged 14%. Q2 revenue was $9.1 billion, up 12%. Its backlog grew 52% to $12.4 billion. The CEO called it the start of a “supercycle.”
- Defense stocks recovered from yesterday’s losses. General Dynamics performed well. It grew revenue 8% to $13 billion.
- Chipotle (CMG) is down 10% after hours. Same-store sales fell 4%. Its annual guidance was also cautious.
- New meme stocks are gaining traction. Krispy Kreme (DNUT) and GoPro (GPRO) surged today. They rose 4% and 12% respectively. At one point, they were up 40% and 70%.
- Sony (SONY) rose 4.86%. A Reuters report suggested it would sell its mobile chip division.
- Hasbro (HAS) fell 0.94% after its earnings report.
Looking Ahead: Key Events
Building permits data will be released tomorrow. The S&P Global PMI is also due. Earnings will be reported by Honeywell and Blackstone before the market open. Intel will report after the market closes.
Important Notice This content is for informational purposes only. It is not financial advice. Stock market investing involves significant risks. Past performance does not guarantee future results. Investors should conduct their own research. You should consult a qualified professional advisor.