US stock market rallies as US–EU trade deal, Nvidia and Tesla gains lift S&P 500, Nasdaq to new highs while Dow lags
: trade deal optimism and big earnings week lift investor mood-
The US stock market today started the week with cautious optimism as investors welcomed a new U.S.–EU trade agreement that eased tariff concerns and boosted global trade confidence. Major indexes like the S&P 500 and Nasdaq edged higher, driven by gains in technology, energy, and defense stocks, while the Dow Jones remained mostly flat. The deal, spearheaded by President Donald Trump, reduces transatlantic tariff tensions and opens the door for increased U.S. exports, particularly in the energy and defense sectors.
This development came just ahead of what's shaping up to be a critical week on Wall Street, with mega-cap tech earnings, Federal Reserve decisions, and key economic data releases all lined up.
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S&P 500
rose approximately 0.1% today, flirting with record territory as tech and energy stocks rallied.
Nasdaq Composite
led the market higher with gains around 0.4%, driven by strong performance among AI-related and semiconductor names.
Dow Jones Industrial Average
was nearly unchanged, edging up just a few tenths of a percent.
Dow, S&P 500, Nasdaq show mixed momentum but hold strong ground
The Dow Jones Industrial Average opened slightly lower, slipping by about 0.1%, reflecting cautious sentiment as investors weighed the long-term impact of the trade accord. However, the
S&P 500
rose about 0.14%, while the
Nasdaq Composite
gained around 0.3% to 0.4% in early trading. Both indices touched fresh record highs, signaling strong momentum in growth and tech-heavy sectors.
Tech Stocks lead gains as Nvidia, Tesla, Apple move higher
Tech stocks were the clear winners of the morning session. Nvidia surged to a new all-time high, benefiting from the ongoing AI boom and anticipation around upcoming earnings. Tesla shares also rallied following news of a $16.5 billion AI chip partnership with Samsung, which strengthens Tesla's position in the autonomous vehicle and energy grid software space.
Meanwhile, Apple, Amazon, and Meta—all scheduled to report earnings this week—traded higher as expectations built around strong revenue performance amid robust demand and ongoing AI integration into their ecosystems.
Live Events
Top stocks related to the market story about the U.S.-EU trade deal, upcoming Fed decision, and tech earnings:
Nvidia (NVDA)
– Surged on continued AI momentum and upcoming earnings.
Tesla (TSLA)
– Gained on a $16.5B AI chip partnership with Samsung.
Apple (AAPL), Amazon (AMZN), Meta (META), Microsoft (MSFT)
– Big techs set to report earnings this week.
Cheniere Energy (LNG), NextDecade (NEXT)
– Benefiting from EU's $750B energy purchase deal.
Lockheed Martin (LMT), RTX Corp. (RTX)
– Defense stocks rally on EU import commitments.
Nike (NKE)
– Rose after JPMorgan upgraded the stock.
Energy and Defense stocks rally on EU commitments
The U.S.-EU trade deal included a significant commitment from Europe to purchase
$750 billion worth of U.S. energy products
. This sent stocks like Cheniere Energy and NextDecade soaring, as investors bet on a long-term export boom in liquefied natural gas (LNG) and related infrastructure.
Defense contractors also saw a bump, with Lockheed Martin, RTX, and Northrop Grumman gaining ground. Analysts expect European nations to ramp up U.S. defense imports amid ongoing geopolitical tensions and shifting security policies.
Fed meeting, GDP data, and inflation report may cause volatility
Even with the trade deal easing short-term tensions, market participants are bracing for a volatile week due to upcoming macroeconomic triggers. The Federal Reserve is set to announce its latest interest rate decision on Wednesday, with traders expecting the central bank to hold rates steady but offer clues on future easing.
In addition, investors are closely watching the GDP growth figures, June PCE inflation report, consumer confidence index, and July jobs data, all of which could heavily influence near-term market direction and sentiment.
Market sentiment supported by easing inflation and stable earnings outlook
Recent economic indicators suggest inflation is cooling steadily while consumer spending remains resilient. This dual effect is reinforcing a soft-landing narrative, which many on Wall Street are embracing with cautious optimism. Combined with strong quarterly earnings reports from key sectors like tech, finance, and healthcare, the market outlook for Q3 appears more stable than initially feared.
However, some analysts warn that valuations remain stretched, especially in the technology space, and any miss in earnings or hawkish surprise from the Fed could quickly shift the tone.
Nike jumps on analyst upgrade amid global demand strength
In individual stock movers, Nike shares rose nearly 4% after JPMorgan upgraded the company from 'neutral' to 'overweight.' The firm cited renewed momentum in international orders and improving margins in key regions such as Asia-Pacific and Europe. This upgrade sparked renewed interest in consumer discretionary stocks, which have underperformed in recent months due to inflation and inventory headwinds.
Investor takeaway: momentum strong but risks remain
While today's trade-driven bounce adds fuel to the recent rally, market participants are well aware that several risk events loom large. The U.S. economy is at a pivotal juncture—too much Fed tightening or disappointing economic data could derail the rally. On the other hand, signs of disinflation and strong corporate earnings could push the S&P 500 and Nasdaq to even higher highs.
Investors are advised to watch key earnings (especially Apple, Amazon, Microsoft, Meta, and Alphabet), listen to Fed Chair Jerome Powell's tone, and monitor real-time macro releases to gauge short-term risks.
Snapshot: major index performance (as of monday morning)
Index
Movement
Notes
Dow Jones
-0.1%
Slight dip; traders await Fed guidance
S&P 500
+0.14%
Near record highs; tech drives gains
Nasdaq
+0.35%
New highs; AI and chip stocks rally
What to watch this week: top events and earnings to track
Federal Reserve meeting
– Interest rate decision (Wednesday)
Apple, Amazon, Meta, Microsoft earnings
– Critical tech results
GDP growth rate
– Q2 data to assess economic strength
Core PCE index
– Key inflation gauge the Fed watches
July jobs report
– Labor market health and wage trends
These events have the potential to cause significant volatility across sectors, particularly in tech, financials, and consumer discretionary.
Can the market rally continue?
Monday's early gains set a hopeful tone, but the week ahead will be a real test of investor conviction. The combination of a successful U.S.-EU trade agreement and strong earnings from key sectors could sustain bullish momentum. However, macro data and central bank commentary remain wild cards.
In the short term, expect rotation between sectors—with tech, energy, and defense likely to remain strong performers—while rate-sensitive sectors like real estate and banking may tread cautiously.
If the Fed confirms its rate-hiking pause and economic data supports the soft-landing scenario, the S&P 500 and Nasdaq could extend their record-setting runs into August. But any sign of economic weakness or Fed hawkishness could trigger swift pullbacks.
FAQs:
Q1: What is boosting the US stock market this week?
The US-EU trade deal and upcoming tech earnings are lifting market sentiment.
Q2: Why are Nvidia and Tesla stock rising?
Both stocks are up due to strong AI demand and Tesla's major chip deal.
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