US stock markets experienced a mixed day of trading on Thursday as optimism surrounding a potential US-EU trade agreement kept major indices close to record levels. Wall Street was actively evaluating earnings reports from major technology firms, including Alphabet (GOOG) and Tesla (TSLA).
The Dow Jones Industrial Average (^DJI) fell by 0.3%, reversing some earlier losses after IBM (IBM) shares dipped following their earnings announcement. The blue-chip index had nearly reached its first record closing mark of the year the previous day.
In contrast, the tech-centric Nasdaq Composite (^IXIC) increased by about 0.1%, and the S&P 500 (^GSPC) advanced by 0.2%, fueled by optimism from achieving multiple all-time highs.
Alphabet’s quarterly results exceeded Wall Street’s expectations, prompting the company to reaffirm its significant investments in artificial intelligence. This positive news contributed to a rise in Alphabet’s shares, which lifted other AI-focused stocks such as Nvidia (NVDA).
However, Tesla faced challenges as its stock price dropped after reporting disappointing earnings results. A continued decline in European sales coupled with comments from CEO Elon Musk, who warned of “rough quarters” ahead due to the termination of tax credits linked to President Trump’s budget bill, contributed to Tesla’s downward trajectory.
The ongoing earnings season included reports from Intel (INTC) and American Airlines (AAL) on Thursday, adding to the market’s activity.
On the trade front, optimism is high as reports suggest that the US and EU are nearing an agreement that would set a 15% tariff on most European imports, a reduction from the previously threatened 30%. This new tariff rate might serve as a baseline for “reciprocal” tariffs set to commence on August 1, as indicated by President Trump’s recent comments. This follows a productive US-Japan trade pact that previously boosted records for the S&P 500 and Nasdaq.
In other economic news, weekly initial jobless claims revealed the labor market’s current state, showing claims at their lowest since April. However, continuing claims indicate that job seekers are still facing challenges, remaining near their highest levels since 2021. Updates on US manufacturing, service activity for July, and new home sales are on the agenda, promising further insights into the economic landscape.
This blend of corporate earnings and evolving trade negotiations indicates a dynamic market landscape, where the interplay between economic indicators and corporate performance will guide investor sentiment in the coming weeks.