U.S. stocks closed higher on Wednesday following positive developments on the tariff and trade front. The trade deal with Japan and negotiations with the European Union, China and other major trading partners of the United States boosted market participants sentiment. All three major stock indexes ended in positive territory.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) advanced 1.1% or 507.85 points to close at 45,010.29. This marked the blue-chip index’s first close above the key technical barrier of 45,000 since Dec 4, 2024. Notably, 22 components of the 30-stock index ended in positive territory and eight finished in negative territory. The index is currently less than 64 points away from its all-time high posted on Dec 4,2024.
The tech-heavy Nasdaq Composite finished at 21.020.02, rising 0.6% or 127.33 points, backed by a strong performance by major AI chip manufacturers. This reflects the tech-laden index’s first ever close above the major technical threshold of 21,000.
AI chip manufacturing behemoths like NVIDIA Corp. NVDA and Advanced Micro Devices Inc. AMD advanced 2.3% and 2.5%, respectively. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 0.8% to finish at 6,358.91, marking its 12th closing high this year. In intraday trading, Wall Street’s most observed benchmark posted a new all-time high of 6,360.64. Out of the 11 broad sectors of the broad-market index, 10 ended in positive territory while one ended in negative territory. The Energy Select Sector SPDR (XLE) and the Industrials Select Sector SPDR (XLI) rose 1.6% and 1.8%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) fell 0.8%.
The fear-gauge CBOE Volatility Index (VIX) was down 6.9% to 15.37. A total of 19.1 billion shares were traded on Wednesday, higher than the last 20-session average of 17.7 billion. The S&P 500 registered 50 new highs and two new lows, while the Nasdaq posted 96 new highs and 20 new lows.
Positive Developments on Tariff Front
On July 22, President Donald Trump posted on Truth Social that the United States has reached a trade deal with Japan in which “reciprocal” tariffs of 15% will be imposed on Japanese exports. Duties on the Japanese auto sector will also be lowered to 15% from 25% stated earlier. Trump further posted that Japan would invest $550 billion in the United States and the latter would “receive 90% of the profits.”
On July 22, Treasury Secretary Scott Bessent said that the Trump administration is likely to extend the Aug 12 trade deadline with China. Bessent is expected to clear the confusion in this regard when he meets his Chinese counterparts in Stockholm next week.
The Financial Times reported citing three genuine sources that the Trump administration is negotiating with the European Union (EU) to impose at least 15% tariffs in any deal. Earlier, Trump said that he will impose a 30% tariff on the EU if it fails to strike a deal with the United States before Aug 1. Bloomberg also confirmed the progress in the U.S. – EU trade and tariff negotiations.
Moreover, trade and tariff-related negotiations with the United Kingdom, Indonesia and the Philippines are in full motion now so that formal trade deals can be signed between the United States and these trading partners before the Aug 1 deadline set by the President.
Economic Data
The National Association of REALTORS reported that existing-home sales came in at 3.93 million units in June, missing the Zacks Consensus Estimate of 4.05 million units. The metric for May was revised marginally upward to 4.04 million units from 4.03 million reported earlier.
For the week ended July 18, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.2 million barrels from the previous week.
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Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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