S&P 500, Nasdaq move higher, gold softens amid earnings, trade negotiations
The S&P 500 and the Nasdaq were modestly higher in morning trading, while the blue-chip Dow was in negative territory. Benchmark Treasury yields built on Wednesday's gains and gold continued to back down from a five-week high.
"We're in an earnings-driven period right now," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "Earnings and revenues have been good and guidance has been fairly optimistic for the most part. I think (investors) were very worried about the impact of tariffs going forward."
Second-quarter reporting season has hit full stride, with nearly one-third of the companies in the S&P 500 having posted results. Of those, 80% have reported better-than-expected earnings, according to LSEG data.
Analysts currently estimate year-on-year, second-quarter S&P 500 earnings growth of 7.7%, a marked improvement over the 5.8% growth estimate as it stood on July 1, per LSEG.
The European Union said that a negotiated trade agreement with the United States was within reach, with a view toward reaching a deal before President Trump's 30% tariffs scheduled to take effect on August 1. This follows on the heels similar agreement with Japan.
"With each trade agreement, a little bit of the uncertainty regarding tariffs is removed." Tuz added. "And that's given optimism to the market."
U.S. President Donald Trump, a relentless critic of Federal Reserve Chair Jerome Powell, is due to pay a visit to the central bank on Thursday.
This comes amid rising tensions between the administration and the Fed, which is expected to convene for its two-day monetary policy meeting next week, likely culminating in a decision to let key interest rates stand.
The Dow Jones Industrial Average (.DJI), opens new tab fell 159.05 points, or 0.35%, to 44,851.24, the S&P 500 (.SPX), opens new tab rose 13.32 points, or 0.21%, to 6,372.23 and the Nasdaq Composite (.IXIC), opens new tab rose 29.79 points, or 0.14%, to 21,049.81.
European shares advanced and world stocks touched record highs amid reports that the European Union and Washington were close to clinching a tariff agreement, close on the heels of a similar deal with Japan.
The Governing Council of the European Central Bank (ECB) voted to leave interest rates unchanged, stating that inflation has reached its medium-term 2% target, and due to uncertainties over trade disputes.
MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab rose 3.03 points, or 0.32%, to 942.37.
The pan-European STOXX 600 (.STOXX), opens new tab index rose 0.23%, while Europe's broad FTSEurofirst 300 index (.FTEU3), opens new tab rose 4.39 points, or 0.20%.
Emerging market stocks (.MSCIEF), opens new tab rose 2.26 points, or 0.18%, to 1,267.42. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab closed higher by 0.24%, to 667.42, while Japan's Nikkei (.N225), opens new tab rose 655.02 points, or 1.59%, to 41,826.34.
U.S. Treasury yields rose as brightening prospects for trade agreements reduced investor demand for safe-haven assets.
The yield on benchmark U.S. 10-year notes rose 2 basis points to 4.408%, from 4.388% late on Wednesday.
The 30-year bond yield rose 0.2 basis points to 4.9512% from 4.949% late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.2 basis points to 3.916%, from 3.884% late on Wednesday.
The dollar edged higher against the euro but was mixed against the yen amid the flurry of trade negotiations.
The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.04% to 97.24, with the euro up 0.06% at $1.1778.
Against the Japanese yen , the dollar strengthened 0.05% to 146.57.
In cryptocurrencies, bitcoin gained 0.61% to $118,718.26. Ethereum rose 3.44% to $3,693.57.
Oil prices rebounded, buoyed by economic optimism and a sharper-than-expected drop in U.S. inventories.
U.S. crude rose 1.46% to $66.20 a barrel and Brent rose to $69.37 per barrel, up 1.26% on the day.
Gold prices extended their losses as trade deal optimism continued to dampen demand for the safe-haven metal.
Spot gold fell 0.33% to $3,375.89 an ounce. U.S. gold futures fell 0.8% to $3,367.00 an ounce.
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