U.S.-Japan trade pact; Alphabet, Tesla to report - what’s moving markets
Investing.com-- U.S. stock index futures rose on Tuesday evening after President Donald Trump announced a trade deal with Japan, while focus was also squarely on upcoming earnings from Alphabet and Tesla.
Futures steadied after a middling session on Wall Street, although the S&P 500 still eked out a record high amid strong earnings. But technology stocks, especially chipmakers, lost ground after Texas Instruments Incorporated (NASDAQ:TXN) presented a softer-than-expected outlook for the current quarter.
S&P 500 Futures rose 0.2% to 6,358.50 points, while Nasdaq 100 Futures rose 0.1% to 23,249.0 points by 20:03 ET (00:03 GMT). Dow Jones Futures rose 0.2% to 44,795.0 points.
Trump announces ‘massive’ Japan trade deal with 15% tariffs
Trump said in a social media post that his administration had signed a “massive” trade deal with Japan, under which the Asian country will face a 15% tariff. The 15% levy is smaller than the 25% tariff initially threatened by the president.
Trump 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 Inc (NASDAQ:TSLA) and Google owner Alphabet Inc (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, 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 Q2 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.
Apart from the two, other Wall Street majors including IBM (NYSE:IBM), ServiceNow Inc (NYSE:NOW), AT&T Inc (NYSE:T), Nextera Energy Inc (NYSE:NEE), and Moodys Corporation (NYSE:MCO), are also set to report earnings on Wednesday.
Wall Street indexes marked a mixed close on Tuesday, as some strong earnings were offset by a pullback in major technology stocks.
The S&P 500 rose less than 0.1% to a record-high 6,309.59 point close. The NASDAQ Composite fell 0.4% to 20,892.69 points, while the Dow Jones Industrial Average rose 0.4% to 44.502.19 points.