S& P 500 hits all time highs U.S.-Japan trade deal optimism

Investing.com--S&P 500 hit fresh all time highs Wednesday on optimism generated by the trade deal between the U.S. and Japan, while investors awaited the release of earnings from tech giants Alphabet and Tesla.

At 1:09 p.m. ET (17:08 GMT), the Dow Jones Industrial Average rose 399 points, or 0.9%, the S&P 500 index gained 0.5% to hit an all-time high, and the NASDAQ Composite climbed 0.2.%

Trump announces ‘massive’ Japan trade deal  

U.S. President Donald Trump announced, via a social media post, that his administration had signed a “massive” trade deal with Japan, under which imports from the Asian country will face a 15% tariff. The 15% levy is smaller than the 25% tariff initially threatened by the president. 

Trump also said that Japan will invest $550 billion in the United States, and will also open its markets to bringing in more American automobiles and agricultural products, especially rice. 

Trump’s announcement highlights some progress in Washington towards reaching trade deals before an August 1 deadline for the imposition of the president’s tariffs.

But Trump’s tariffs have remained a key point of uncertainty, especially amid warnings from analysts and the Federal Reserve that they could underpin inflation in the coming months. 

Tesla, Alphabet earnings on tap 

Tesla (NASDAQ:TSLA) and Google-owner Alphabet (NASDAQ:GOOGL) are set to report their second-quarter earnings after the bell on Wednesday.

The two will be the first among Wall Street’s so-called Magnificent Seven to report this earnings season, and are expected to provide broader cues for the market.

With Tesla, the focus will be squarely on the company’s shrinking margins, as it grapples with slowing vehicle sales and a bitter price war in major market China. Tesla’s second-quarter deliveries missed market expectations.

Focus will also be on Tesla’s artificial intelligence and robotics efforts, which CEO Elon Musk has touted as driving the next major leg of growth for the company. 

Alphabet’s earnings will be watched for more cues on the AI trade, and whether the technology drove more strength in the tech giant’s top-line. Alphabet’s plans for investing in more AI infrastructure will also be in focus, given that the company is among Wall Street’s so-called AI hyperscalers, and is a major spender on the technology. 

Elsewhere, AT&T (NYSE:T) stock fell after the telecom giant beat second-quarter financial estimates, as it added more monthly phone customers but fewer internet subscribers than analysts had forecast.

Texas Instruments (NASDAQ:TXN) stock slumped after the chipmaker’s quarterly profit forecast indicated a hit to demand for its analog chips that stoked investor fears of tariff-related disruptions.

Hasbro (NASDAQ:HAS) stock rose after the toy giant reported strong second-quarter earnings, driven by record performance from its Magic: The Gathering franchise.

GE Vernova (NYSE:GEV) stock rose after the electric services company reported stronger-than-expected second-quarter results and raised its full-year guidance, citing robust demand for power and grid infrastructure solutions.

Hilton Worldwide (NYSE:HLT) stock fell after the hotel giant’s system-wide comparable revenue per available room declined 0.5% on a currency neutral basis compared to the same period in 2024, a fall attributed to modest occupancy declines.

These releases come amid a busy earnings week. Of the approximately 17% of S&P 500 companies that have reported so far this season, about 85% have posted earnings that surpassed Wall Street’s expectations.

Meme stock fever returns

Meme stock momentum has returned to markets as GoPro Inc (NASDAQ:GPRO) and Krispy Kreme Inc (NASDAQ:DNUT) became the latest stocks to join bandwagon of meme stocks that have rallied recently including Rocket Companies Inc (NYSE:RKT), Opendoor Technologies Inc (NASDAQ:OPEN), and Kohl’s Corp (NYSE:KSS). 

Ambar Warrick contributed to this article