US Markets Update: S&P 500 and Nasdaq Near Record Highs as AI Stocks Perform Well

Wall Street experienced a modest uptick on Friday, with the S&P 500 and Nasdaq Composite nearing record highs as investors prepared for a week filled with corporate earnings reports, macroeconomic data, and critical trade negotiations. The S&P 500 rose by 0.1% in early trading, following its previous record close of 6,363.35, marking its fourth weekly gain in five weeks. Meanwhile, the Nasdaq Composite also increased by 0.1% to reach 21,057.96, while the Dow Jones Industrial Average added 82 points, or 0.2%, to settle at 44,775. These gains occurred despite a backdrop of disappointing earnings from Intel and a decline in global equity markets.

Intel’s Struggles and Earnings Surprises

Intel’s stock took a significant hit, dropping over 7% after the company reported a quarterly loss and announced plans to reduce its workforce by nearly 25% as part of a major cost-cutting initiative. The chipmaker has faced challenges in keeping up with competitors like Nvidia and AMD, particularly amid rising demand for artificial intelligence (AI) chips. In contrast, Deckers Brands, the parent company of Ugg and Hoka, saw its shares soar by more than 13% after exceeding Wall Street expectations with a 17% increase in first-quarter revenue, totaling $965 million. Similarly, Boston Beer Co., known for its Samuel Adams and Truly hard seltzer, experienced a 7.8% jump in its stock price following a 15% rise in net profit for the second quarter.

Trade Agreements and Federal Reserve Policy in Focus

Investor attention is now shifting towards President Donald Trump’s impending August 1 deadline for a series of global trade agreements. There is optimism that these negotiations will lead to deals that could prevent the imposition of new tariffs and mitigate inflationary pressures. A successful outcome could bolster U.S. economic growth and help avert a market downturn. Additionally, the upcoming Federal Reserve policy meeting is drawing scrutiny. While Trump continues to advocate for interest rate cuts, analysts predict that the Fed will maintain its current rates for the fifth consecutive time. Investors are also awaiting three significant labor market reports, including the monthly jobs data, which will provide further insights into the state of the economy.

Global Market Trends and Energy Prices

Asian markets exhibited mixed results, with Tokyo’s Nikkei 225 declining by 0.9% to 41,456.23, breaking a two-day winning streak as Japan’s inflation rate eased to 2.9% in July from 3.1% the previous month. Hong Kong’s Hang Seng index fell by 1.1%, while the Shanghai Composite lost 0.3%. Conversely, South Korea’s Kospi gained 0.2%, and Australia’s ASX 200 dropped by 0.5%. In Europe, markets opened lower, with Germany’s DAX down 0.8%, London’s FTSE 100 falling by 0.4%, and France’s CAC 40 decreasing by 0.1%. In the energy sector, Brent crude oil prices rose by 27 cents to $68.63 per barrel, while U.S. West Texas Intermediate (WTI) increased to $66.30. The U.S. dollar strengthened against the yen, trading at 147.65, while the euro slipped to $1.1723.

Market Volatility and Future Outlook

The stock market has been buoyed in recent weeks by hopes that trade negotiations—especially with Japan, the EU, and China—will lead to manageable tariff levels. Treasury Secretary Scott Bessent is expected to meet with Chinese officials in Stockholm ahead of the August 12 deadline. Analysts from ING Economics noted that markets will be closely monitoring for any signs of a tariff ceasefire or adjustments. They also highlighted that expectations surrounding AI-driven earnings and stable interest rates are currently sustaining investor optimism. As the week unfolds, the interplay of trade negotiations, corporate earnings, and economic data will be critical in shaping market sentiment.

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