S&P 500, Nasdaq gain 0.3% 0.5% on strong earnings, 10.8% trade deficit drop ahead of Fed meeting

Stocks advanced on Tuesday as the S&P 500 and Nasdaq climbed 0.3% and 0.5%, respectively, with markets reacting positively to strong earnings reports and anticipation of upcoming economic data [1]. The Dow Jones Industrial Average added 20 points, with indices nearing record levels amid cautious optimism ahead of the Federal Reserve’s policy meeting and key jobs data [1].

Investor attention is focused on the Federal Reserve’s two-day meeting, beginning July 29, 2025, as policymakers assess the economy’s resilience and potential adjustments to interest rate policy [1]. Concurrently, the Bureau of Labor Statistics is set to release the June Job Openings and Labor Turnover (JOLTS) report, providing fresh insights into labor market dynamics. The nonfarm payrolls report, scheduled for release Friday, will also draw intense scrutiny [1]. These developments come as markets weigh the implications of a potential extension of the U.S.-China trade truce beyond the Aug. 12 deadline, with optimism growing ahead of President Donald Trump’s tariff imposition date [1].

Corporate earnings continue to shape market sentiment, with major technology firms such as Apple, Amazon, Microsoft, and Meta expected to report results. Boeing’s recent second-quarter earnings report, which exceeded analyst forecasts by $1.02 billion in revenue, underscored the strength of corporate performance [1]. The planemaker’s results, coupled with broader earnings momentum, reinforced a bullish tone in equities despite lingering macroeconomic uncertainties [1].

The U.S. goods trade deficit narrowed sharply in June, declining 10.8% to $86.0 billion as imports fell $11.5 billion to $264.2 billion. This contraction aligned with economists’ expectations for a reduced deficit, reflecting the impact of trade agreements like the recently finalized U.S.-EU deal, which bolstered market sentiment [1]. Exports also declined, dropping $1.1 billion to $178.2 billion, but the overall trade balance improvement supported narratives of economic recovery in the second quarter [1].

The interplay between corporate performance, labor market data, and policy decisions is heightening market sensitivity to near-term developments. While the S&P 500 and Nasdaq gained momentum in the prior session following positive trade developments, investors remain cautious about the interplay of tariff timelines and central bank actions [1]. Analysts note that the Fed’s policy path will hinge on whether economic data suggests sustained inflationary pressures or a cooling labor market, though current indicators show mixed signals [1].

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[1] title:S&P 500 rises ahead of Fed meeting, jobs data

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