Stock Market Today: Stocks Climb on Trade Deal News, Tesla and Alphabet’s Earnings in Focus

US stocks rose on Wednesday after the US struck a trade deal with Japan, fueling optimism for more tariff agreements. The Dow Jones Industrial Average surged approximately 0.9%, while the S&P 500 rose 0.5%. The Nasdaq Composite edged up 0.2%, following a mixed day for the stock market. This latest development in trade relations comes just ahead of key earnings reports from Tesla and Alphabet, two major tech players, which are set to shape market sentiment for the rest of the week.

Market Movers:

• Toyota (TM): +13.44%: Toyota soared by over 13% following the news of a trade deal between the US and Japan. The deal, which aims to place a 15% tariff on Japanese imports, was a significant development for Japan’s auto industry. Toyota, along with Honda and Nissan, stands to benefit from the new pact, as it could stabilize trade dynamics between the two nations. The strong reaction reflects the critical role that Japan's auto exports play in its economy.
• Kohl’s (KSS): -15.52%: Kohl’s declined more than 15% on Wednesday, following the meme stock rally the previous day. Despite a nearly 40% surge on Tuesday, the retail giant’s stock has now retreated as retail traders’ enthusiasm wanes. Kohl’s remains a battleground stock with an equal mix of long and short positions, contributing to its extreme volatility. This drop highlights the risks associated with meme stock movements.
• Tesla (TSLA): +0.38%: Tesla inched up by 0.38% as investors await its second-quarter earnings report later today. With concerns over the company’s core auto business and its robotaxi rollout, analysts are particularly focused on how Tesla addresses these areas. The company’s performance amid an uncertain global trade backdrop, including tariff implications, will be under watch.
• Chipotle (CMG): +0.38%: Chipotle gained 0.38% on Wednesday, as investors continue to favor the restaurant chain amidst strong earnings expectations. The company’s consistent growth in same-store sales and expansion in digital offerings continues to draw positive sentiment. As the economy gradually recovers, Chipotle’s ability to leverage its digital and delivery platforms is seen as a key growth driver.
• MARA Holdings (MARA): -10.17%: Shares fell by more than 10% after announcing a proposed $850 million debt offering. The company plans to use the proceeds to acquire more Bitcoin, but investor sentiment soured due to concerns over using debt and equity for cryptocurrency acquisitions. The move comes amid a broader decline in crypto mining stocks, with MARA’s performance contrasting with stronger gains seen by its competitors.

US-Japan Trade Deal Fuels Optimism

The US-Japan trade deal is a key focus of today’s trading. The agreement, which places a 15% tariff on Japanese imports (down from the 25% previously threatened), has given investors hope that more trade deals can be reached ahead of President Trump’s upcoming tariff deadline on August 1. This announcement has helped soothe some of the uncertainty surrounding global trade and paves the way for future agreements with other major trade partners, such as the European Union and China.

Although the US-Japan deal is seen as a win for both sides, the auto industry is divided. While Japanese automakers like Toyota, Honda, and Nissan saw their stocks rise, US manufacturers have voiced concerns. General Motors, Ford, and Stellantis have criticized the deal, arguing that it unfairly benefits Japanese automakers with lower tariffs on imports compared to US-made vehicles, raising the stakes for US workers and manufacturers.

Earnings Season in Full Swing

Attention is on Tesla and Alphabet, which are both reporting their second-quarter results today. Tesla’s stock has faced significant challenges this year, with a nearly 18% decline, and investors are looking for signs of resilience in its core auto business and updates on its robotaxi program. With the company’s stock down year-to-date, much of the focus will be on whether Tesla can maintain its growth trajectory and deliver on its promises for more affordable EV models.

Alphabet, on the other hand, has invested heavily in artificial intelligence, and investors are eager to see if those investments are paying off. With AI being a central focus, Alphabet's performance could set the tone for the broader tech sector, which has been buoyed by AI-related advancements. However, a looming legal challenge over Google Chrome could also be a key topic during the earnings call.

Gold’s Retreat and Other Market News

Gold prices have taken a breather after a three-day rally, as the US-Japan trade deal alleviated some demand for safe-haven assets. Gold futures fell by 1.27%, but silver prices rose 0.6%, driven by increased demand for the metal. Investors continue to monitor global uncertainties, including ongoing tensions in Ukraine and the Middle East, which have contributed to a strong year for gold. The Federal Reserve’s stance on interest rates will also play a key role in the price movement of precious metals.

Meanwhile, other major earnings reports are also on the radar. AT&T has reported a surge in subscribers but saw its stock dip by over 3% in premarket trading, signaling that growth in its wireless division might not be enough to offset concerns. Additionally, Texas Instruments’ disappointing guidance has raised concerns about the impact of tariffs on corporate profits, especially in the tech sector.

Looking Ahead

As we move further into earnings season, all eyes will be on the results from Tesla and Alphabet, which could significantly impact the broader market’s direction. If these tech giants deliver strong earnings, it could reinforce the current optimism around AI and tech stocks, driving further gains in the market. However, any disappointments could lead to volatility, particularly in the Nasdaq.

Additionally, the ongoing developments in trade talks, particularly with the European Union and China, will be critical in shaping market sentiment. The trade deal with Japan has given markets a boost, but further progress on tariff agreements will be closely watched in the coming weeks.