S&P 500 and Nasdaq notch record closes
Alphabet rose 1% as the search giant's results boosted confidence that heavy investment in a race to dominate AI technology is paying off.
Shares of Microsoft, Nvidia and Amazon each climbed 1% or more.
The US-Japan trade deal and recent signs of progress in talks with the European Union also fuelled Wall Street's gains.
"Investors are feeling optimistic about trade negotiations, about the economy, the trend in inflation, as well as the better-than-expected Q2 earnings reports," said Sam Stovall, chief investment strategist at CFRA Research.
Tesla tumbled 8.2% after CEO Elon Musk warned of a "few rough quarters" as the US government cuts support for electric vehicle makers. The stock has fallen around 25% so far in 2025.
UnitedHealth fell 4.8% after the insurer revealed it was cooperating with a Department of Justice probe into its Medicare practices, following reports of both criminal and civil investigations.
IBM dropped almost 8% after its second-quarter results fell flat with investors, hampered by disappointing sales in its core software division.
Honeywell fell 6.2% despite topping Wall Street's expectations and raising its annual outlook.
The S&P 500 crept up 0.07% to end the session at 6,363.35 points. The Nasdaq gained 0.18% to 21,057.96 points, while the Dow Jones Industrial Average declined 0.70% to 44,693.91 points.
Volume on US exchanges was relatively heavy, with 19.9 billion shares traded, compared to an average of 17.8 billion shares over the previous 20 sessions.
Eight of the 11 S&P 500 sector indices declined, led lower by consumer discretionary, down 1.23%, followed by a 0.75% loss in materials.
American Airlines tumbled nearly 10% after the carrier forecast a big third-quarter loss, hurt by sluggish domestic travel demand.
US President Donald Trump's global trade war has created the biggest uncertainty for the airline industry since the Covid-19 pandemic.
Markets were also monitoring Trump's planned visit to the Federal Reserve's headquarters on Thursday, following months of the president criticising Fed chair Jerome Powell for interest rates that Trump views as too high.
With the Fed widely expected to hold rates steady at next week's meeting, traders see a 60% chance of a September rate cut, according to CME's FedWatch tool.
A US Labor Department report showed jobless claims last week fell to 217,000 – well below estimates – signaling continued resilience in the job market.
US business activity gained momentum in July, but companies hiked prices on goods and services, fueling economists' predictions of faster inflation in the months ahead, largely driven by rising import tariffs.
Declining stocks outnumbered rising ones within the S&P 500 by a 1.3-to-one ratio.
The S&P 500 posted 46 new highs and 6 new lows; the Nasdaq recorded 81 new highs and 44 new lows. — Reuters
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