S&P 500 Hits Record High, Historically Poised to Finish 2025 Even Higher.

The S&P 500 has reached a new record high, closing at 6,304, marking its tenth record high of 2025. Despite near bear market territory in April, the index is up over 7% YTD. History suggests the index will finish 2025 even higher.

The S&P 500 (^GSPC) closed at a new record high of 6,304 on Wednesday, marking its tenth record close of 2025. Despite near bear market territory in April, the index is up over 7% year-to-date (YTD) [1]. This performance is remarkable, especially considering that the index started 2025 with one of the worst starts in the last 70 years [3].

The rally was driven by several factors. The U.S. struck a trade deal with Japan, which lifted hopes for further tariff pacts. The agreement places a 15% tariff on Japanese imports, a step down from the threatened 25% duties set to hit next week. Additionally, Tokyo will make $550 billion in US investment. This deal boosted optimism that more trade deals will be sealed before Aug. 1, when Trump's sweeping tariffs kick in [1].

While negotiations with other major partners, such as the European Union and China, have been slow, reports suggest progress is being made. The S&P 500's performance is also buoyed by strong earnings reports from companies like Alphabet (GOOGL, GOOG), which beat expectations on the top and bottom lines. However, Tesla (TSLA) reported a slight earnings miss in the second quarter but maintained its plans for the "more affordable" model in 2025 [1].

Looking ahead, the S&P 500 is expected to finish 2025 even higher, given its history of positive performance. The index has shown resilience despite near bear market conditions and has a strong track record of beating estimates. For instance, Group 1 Automotive (GPI), scheduled to announce its Q2 earnings results on Thursday, has a history of beating EPS and revenue estimates [2].

In conclusion, the S&P 500's record highs and positive YTD performance are indicative of a strong market sentiment driven by trade deals and robust earnings. Investors should continue to monitor these developments and other economic indicators to gauge future market movements.

References:
[1] https://finance.yahoo.com/news/live/stock-market-today-sp-500-nasdaq-hit-records-dow-closes-in-as-trade-hopes-lift-stocks-before-tesla-google-232647998.html
[2] https://seekingalpha.com/news/4470721-group-1-automotive-q2-2025-earnings-preview
[3] https://www.currentmarketvaluation.com/quick-charts/s&p-ytd-performance.php