Wall St extends gains after report of US-EU nearing trade deal
Wall Street, already on an upward trajectory, spiked after the report said that the U.S. and the EU are nearing a deal to set 15% tariffs on all European imports.
Both sides would waive tariffs on some products, including aircraft, spirits and medical devices, the report said.
The bullish momentum followed closely on the heels of Trump's trade deal with Japan, which will slash tariffs on Japanese autos to 15% from 27.5%, with duties on other goods also dropping to 15% from 25%.
An agreement with the Philippines also followed, which yielded a modest cut in tariff rate.
At 12:20 p.m. ET, the S&P 500 (.SPX), opens new tab gained 31.08 points, or 0.49%, to 6,340.70 and the Nasdaq Composite (.IXIC), opens new tab rose 43.28 points, or 0.21%, to 20,935.97.
The Dow Jones Industrial Average (.DJI), opens new tab edged higher 417.80 points, or 0.93%, to 44,917.71, within striking distance of its record peak.
Wall Street's "fear gauge", the CBOE Volatility Index (.VIX), opens new tab, dipped to its lowest level in over five months.
Earlier in the day, the European Commission was preparing to seek approval for 93 billion euros ($109 billion) in counter-tariffs on American goods just in case the talks fell through.
"The key thing is the markets have confidence that the White House is going to continue to work through these trade deals," said Larry Tentarelli, chief technical strategist for Blue Chip Daily Trend Report.
Investors are now laser-focused on earnings from the "Magnificent Seven" — a group of marquee names that has helped propel U.S. stocks to all-time highs.
EV maker Tesla (TSLA.O), opens new tab and Google-parent Alphabet (GOOGL.O), opens new tab are set to report after the bell on Wednesday. With AI optimism running high and valuations stretched, expectations for these tech giants are sky-high, leaving little margin for disappointment.
Shares of Tesla were largely steady, while Alphabet moved 0.9% lower.
GE Vernova's (GEV.N), opens new tab shares climbed 14.1% to an all-time high, as the power equipment maker raised its current-year revenue and free cash flow forecasts after beating Wall Street estimates for second-quarter profit.
The stock, which has gained about 91% so far this year, boosted the S&P's industrials index (.SPLRCI), opens new tab for the day, up 1.6%.
Medical equipment maker Thermo Fisher (TMO.N), opens new tab surged 11.8% after beating Wall Street's estimates for second-quarter profit and revenue.
Of the 117 companies in the S&P 500 that have reported earnings to date, 84.6% have reported above analysts' expectations, as per data compiled by LSEG I/B/E/S.
On the downside, Texas Instruments (TXN.O), opens new tab tumbled 12.1% after its quarterly profit forecast failed to impress investors, pointing to weaker-than-expected demand for its analog chips from some customers and underscored tariff-related uncertainty.
The earnings also weighed on its peer analog chipmakers, with NXP Semiconductors (NXPI.O), opens new tab, Analog Devices (ADI.O), opens new tab and ON Semiconductor (ON.O), opens new tab falling between 2.7% and 6.7%.
In economic data, U.S. existing home sales fell more than expected in June. Focus now shifts to Thursday's weekly jobless claims numbers and S&P Global's flash PMI data to gauge economic health in the wake of tariff uncertainties.
Following a mixed set of economic data last week, traders have ruled out an interest rate cut by the Federal Reserve next week. Odds for a September reduction stand at about 58%, according to the CME FedWatch tool.
Advancing issues outnumbered decliners by a 1.97-to-1 ratio on the NYSE and by a 1.91-to-1 ratio on the Nasdaq.
The S&P 500 posted 43 new 52-week highs and two new lows, while the Nasdaq Composite recorded 80 new highs and 16 new lows.
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