Earnings Momentum and Trade Optimism Drive Record Highs

Market Overview

The S&P 500 hit fresh all-time highs, posting gains across all five sessions and rising 1.47% for the week. The Dow added 1.28%, while the Nasdaq advanced 1.02% as investors navigated a flurry of Q2 earnings reports and global trade headlines. Tech remained in focus with Alphabet (GOOGL) rallying on strong AI-driven demand, while Tesla (TSLA) fell after reporting its steepest revenue drop in a decade.

Globally, equities were buoyed by trade optimism. Washington announced reduced tariffs on Japanese goods and secured significant investment commitments from Tokyo, lifting sentiment across Asian markets. The STOXX 600 in Europe posted modest gains as investors weighed corporate earnings from major banks and automakers alongside ECB’s steady rate policy.

Sector performance was led by Health Care (+3.5%), Materials (+2.3%), and Industrials (+2.3%) , which remain the best-performing sector year-to-date with an 18.4% gain.

Federal Reserve Insights and Economic Roundup

Bond markets were mixed as U.S. Treasuries traded higher despite rising global yields. The U.S. Aggregate Index rose 0.37% on the week, while high-yield bonds gained 0.35%. Key U.S. Treasury yields were stable, with the 10-year closing at 4.40%.

The economic data backdrop was light but positive. July PMIs signaled the strongest services activity of 2025, offsetting manufacturing weakness. Initial jobless claims fell slightly, and durable goods orders met expectations. The dollar weakened against major peers as trade deals and Fed independence eased investor concerns.

The Week Ahead

Markets turn their attention to the Federal Reserve’s July 30 meeting and the advance Q2 GDP report. Key data releases include:

Tuesday: JOLTS Job Openings (Jun), Consumer Confidence (Jul)

Wednesday: ADP Employment Report, Q2 GDP, Pending Home Sales

Thursday: Core PCE (Jun), Jobless Claims, Chicago PMI

Friday: July Payrolls, ISM Manufacturing, and Michigan Consumer Sentiment