Stock Index Futures Rise as U.S. Secures Trade Deal with Japan, Eyes Tesla and Alphabet Earnings
Market Gains as U.S. Announces Trade Deals with Japan and Philippines
U.S. stock index futures saw gains on Wednesday, with September S&P 500 E-Mini futures rising by +0.39% and September Nasdaq 100 E-Mini futures increasing by +0.19%. This positive momentum came after the U.S. announced a trade deal with Japan, which boosted investor sentiment.
President Donald Trump shared on social media that the U.S. would impose a 15% tariff on Japanese goods, including automobiles, which is lower than the previously threatened 25% rate. The agreement also includes a $550 billion investment from Japan into the U.S. Additionally, the U.S. reached a deal with the Philippines, setting a 19% tariff on its exports. Further details of a pact with Indonesia were also revealed.
Investors are now closely watching upcoming corporate earnings reports, especially those from major tech companies known as the “Magnificent Seven,” such as Tesla and Alphabet.
In yesterday’s trading session, Wall Street’s major indexes ended mixed. IQVIA Holdings surged over +17% following strong Q2 results, while Paccar climbed more than +6% due to better-than-expected Q2 performance. D.R. Horton also jumped over +16% after reporting positive FQ3 results. On the downside, Lockheed Martin fell over -10% after missing revenue expectations and lowering full-year EPS guidance.
Economic data released on Tuesday showed that the U.S. Richmond Fed manufacturing index fell to an 11-month low of -20 in July, below expectations of -2. This indicates some concerns about the manufacturing sector.
The second-quarter earnings season is underway, with significant attention on reports from Tesla and Alphabet. Other notable companies like T-Mobile US, IBM, ServiceNow, AT&T, Thermo Fisher Scientific, and Chipotle Mexican Grill will also release their results. According to Bloomberg Intelligence, S&P 500 companies are expected to show an average +3.2% increase in quarterly earnings for Q2 compared to the previous year, slightly above the pre-season forecast of +2.8%.
Investors will also monitor the U.S. Existing Home Sales data, with forecasts predicting 4.00 million sales for June, slightly below May's figure of 4.03 million. U.S. Crude Oil Inventories data is also expected today, with economists anticipating a decrease of -1.400M compared to last week’s value of -3.859M.
U.S. rate futures indicate a 95.3% chance of no rate change and a 4.7% chance of a 25 basis point cut at the next policy meeting. In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.381%, up +1.04%.
Global Markets React to U.S.-Japan Trade Deal
The Euro Stoxx 50 Index rose by +1.55% as investors became optimistic about potential U.S.-EU trade agreements. Automobile stocks led the gains after the U.S.-Japan trade deal boosted sector sentiment. Healthcare stocks also climbed, aided by upbeat earnings from Lonza. Meanwhile, the prospects of an EU-U.S. trade agreement improved after Trump indicated that EU representatives would arrive for negotiations.
In corporate news, Temenos AG surged over +20% after lifting its annual earnings guidance, while Nokia Oyj fell more than -6% after cutting its 2025 comparable operating profit guidance.
Asian stock markets closed in the green, with China’s Shanghai Composite Index up +0.01% and Japan’s Nikkei 225 Stock Index rising +3.51%. The Nikkei hit a one-year high as the U.S.-Japan trade deal reduced tariffs on imports from Japan, including automobiles.
Pre-Market Moves and Upcoming Earnings
Pre-market trading saw significant movements, with Texas Instruments plunging over -12% after issuing disappointing Q3 earnings guidance. Enphase Energy also fell more than -7% following a tepid Q3 revenue forecast.
Today’s earnings spotlight includes major companies such as Alphabet, Tesla, T-Mobile US, IBM, ServiceNow, AT&T, Thermo Fisher Scientific, and Chipotle Mexican Grill. Investors are eagerly awaiting these reports as they could influence market trends.
As the market continues to react to recent developments, investors remain focused on both domestic and international economic indicators, corporate earnings, and potential shifts in trade policies.