Market Hits New Highs Amid Trade Deals and Earnings Reports

In this analysis, I see the market reaching new all-time highs: the S&P 500 has increased by another 1.3%, closing above 6300 points for the first time, while the Nasdaq has gained half a percent and set a record as well. Bitcoin experienced a dip to $114,000 on Friday but rebounded over the weekend to reach $119,000, reflecting strong investor confidence in cryptocurrencies. On Sunday, news emerged that the US and the EU have finalized a trade agreement, reducing tariffs on most EU exports from 30% to 15%. President Trump also announced that the EU will purchase $750 billion worth of US energy and US-made weapons, indicating a positive shift in international trade relations which can bolster market optimism. Approximately 31% of S&P 500 companies have reported earnings, and according to FactSet, the average profit growth forecast for the year has increased from 5.35% last week to 6.35%. This suggests improving corporate earnings outlooks, further fueling the bullish momentum. Upcoming, the focus will be on the reports from major tech giants: Apple, Amazon, Microsoft, and Meta. Investors will closely watch their AI-related expenditures, especially after Alphabet increased its AI capital expenditure forecast by $10 billion, signifying ongoing investments in cutting-edge technology. On Wednesday, the Federal Reserve will announce its interest rate decision. Despite President Trump’s pressure on Fed Chair Powell, the likelihood of a rate cut is minimal, with markets only pricing in a 3% chance. However, about 64% of investors anticipate at least a quarter-point rate reduction in September, indicating some expectations for future easing. On Thursday, the PCE inflation indicator, a preferred measure for the Fed, will be released, followed by the full employment report on Friday. This week’s data can significantly influence the market trajectory and economic outlook for the rest of the year. The reports from 164 other S&P 500 participants, including Carvana, Robinhood, Coinbase, Starbucks, and UnitedHealth, will be crucial for assessing market directions. Adding these companies to your watchlist on UTEX can help you stay ahead of potential market movements.