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Investing.com-- The S&P 500 and Nasdaq clinched another record closing high Thursday underpinned by trade deal optimism and an Alphabet-led climb in tech.
At 4:00 p.m. ET (20:00 GMT), the Dow Jones Industrial Average fell 316 points, or 0.7%, while the S&P 500 index rose 0.1%, and the NASDAQ Composite gained 0.2%.
Alphabet rises on strong quarter
Roughly a quarter of firms in the S&P 500 have now reported their latest quarterly earnings, and the second-quarter reporting period has been generally robust -- 67% of these groups have topped analysts’ revenue estimates and 88% have surpassed earnings per share projections.
One of the success stories was Alphabet (NASDAQ:GOOGL), as the Google parent handily beat Wall Street expectations with its second-quarter earnings.
The company flagged growing demand for its cloud services, and hiked its 2025 capital spending target to about $85 billion from $75 billion, while also forecasting higher spending in 2026.
Google’s better-than-expected quarterly results showed that it is "generating enough leverage to offset the ongoing GenAI infra build, and at this level of capital intensity, the moat around the business continues to expand," UBS analysts said in a recent note.
On the flip side, Tesla (NASDAQ:TSLA) slumped with CEO Elon Musk flagging a “few rough quarters” for the electric vehicle maker after it clocked an underwhelming second quarter.
International Business Machines (NYSE:IBM) stock also fell after the technology company’s second quarter software revenue missed expectations.
Elsewhere, Unitedhealth (NYSE:UNH) stock fell after the healthcare company disclosed it is under investigation by the Department of Justice regarding aspects of its Medicare program participation.
American Eagle Outfitters (NYSE:AEO) stock surged after the clothes retailer unveiled a new denim campaign with popular actress Sydney Sweeney, to reignite sales and reconnect with Gen Z shoppers.
Dow (NYSE:DOW) stock fell heavily after the chemical giant reported a bigger-than-expected quarterly loss and halved its dividend amid a prolonged industry downturn.
Chipotle (NYSE:CMG) stock slumped after the Mexican-themed fast food chain reported a bigger-than-expected fall in quarterly sales as weak consumer spending caused the company to temper its annual sales target.
Trade deals optimism
Sentiment has been boosted by a Financial Times report that the U.S. and European Union were making progress toward a trade agreement that would place a baseline 15% tariff on items incoming from the bloc, following on from the trade pact announced Japan earlier in the week.
These developments have helped to ease longstanding concerns over uncertainty around Trump’s tariff agenda as an August 1 deadline for his elevated "reciprocal" tariffs to kick in inches closer.
PMI data in focus
Away from the corporate sector, data released earlier Thursday showed that the number of Americans filing for first-time unemployment benefits edged lower last week, as the U.S. labor market remains broadly resilient despite recent tariff-fueled economic uncertainty.
Initial jobless claims for the week ended on July 19 came in at 217,000, down from 221,000 in the prior week and below economists’ estimates of 227,000, data from the Labor Department showed on Thursday.
The focus is now on the publication of flash purchasing managers’ index figures later in the session ahead of next week’s Federal Reserve meeting.
Economists anticipate that the preliminary manufacturing PMI reading from S&P Global for July will come in at 52.7, down slightly from 52.9 in the previous month. A gauge of services activity is tipped to edge up slightly to 53.0 from 52.9.
Numbers above the 50-point mark indicate expansion.
Peter Nurse, Ambar Warrick contributed to this article