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On Wednesday, the S&P 500 Index closed up by 0.78%, reaching a new all-time high, while the Dow Jones Industrial Index increased by 1.14%, marking a 5.5-month high. The Nasdaq 100 Index rose by 0.43%. This rally was largely stimulated by positive trade news, including a new trade deal announced by President Trump with Japan that imposes a reduced 15% tariff on imports instead of the previously planned 25%.
Additionally, the U.S. and European Union are reportedly progressing toward a trade agreement that would enforce a 15% tariff on most imports. In contrast, existing home sales in June fell by 2.7% month-over-month to a 9-month low of 3.93 million, contrary to expectations of a 0.7% decline to 4.00 million. In mortgage news, applications rose by 0.8% for the week ending July 18, while the average 30-year fixed mortgage rate increased to 6.84%.
Looking ahead, markets are awaiting the August 1 deadline set by President Trump for trade deal negotiations, with expectations for initial unemployment claims to rise by 5,000 to 226,000 this week. Earnings growth in the S&P 500 for Q2 is tracking at 3.2%, surpassing the initial forecast of 2.8%, but only six out of eleven sectors are expected to report an increase in earnings, the lowest since Q1 2023.
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