Wall Street Surges as Trump Announces Major Trade Deals

Wall Street rose on Wednesday, with the Dow closing just 4 points shy of its record high, driven by President Trump's announcement of a "massive" trade agreement with Japan and news of a potential trade deal with the EU. The broader market averages finished higher, with the blue-chip Dow leading the gains.

Wall Street experienced a significant rise on Wednesday, with the Dow closing just 4 points shy of its record high, driven by President Donald Trump's announcement of a "massive" trade agreement with Japan and news of a potential trade deal with the European Union. The broader market averages finished higher, with the blue-chip Dow leading the gains.

The S&P 500 climbed more than 0.5% to hit an all-time high of 6,347.09, while the Dow Jones Industrial Average gained 0.86% to reach a record high of 44,926.55 [1]. The SPDR S&P 500 ETF (SPY) was up 0.52%, and the SPDR Dow Jones Industrial Average ETF (DIA) gained 0.91%. Retail sentiment around SPY remained in 'neutral' territory, while sentiment around DIA dipped to 'bearish' [1].

Trump's trade agreement with Japan, announced on Tuesday, is considered the largest U.S. trade deal in history. Under the agreement, Japan will invest $550 billion in the U.S. and pay a 15% reciprocal tariff on its exports. Trump claims the U.S. will receive 90% of the profits, while Japan opens its market to American vehicles and agricultural goods [2, 3]. The trade agreement lowers the tariff rate on Japanese products to 15%, putting it below the threatened rate of 25% but higher than a universal rate of 10% faced by nearly all imports [2].

Japan's Nikkei index surged 3.5% on Wednesday, while major U.S. indexes nudged slightly higher in early trading [2]. Shares of Japan-based Toyota soared more than 13% on Wednesday, while Honda jumped about 12% [2].

Investors are also watching Google-parent Alphabet (GOOG/GOOGL) and Elon Musk-led Tesla (TSLA), scheduled to report second-quarter (Q2) earnings after the bell. However, both were trending lower in afternoon trade on Wednesday. Alphabet’s stock edged 0.68% lower while Tesla’s stock fell nearly 1% [1].

The EU and the U.S. are reportedly making progress toward a trade deal that would see 15% tariffs on most goods imported into the U.S. from the 27-nation bloc [1]. Additionally, Washington's new 'AI Action Plan' proposed softer regulations and expanding the energy supply for data centers, urging the federal government to withhold funding from states that have regulations hindering the development of emerging technologies [1].

References:
[1] https://stocktwits.com/news-articles/markets/equity/s-and-p-500-dow-jones-hit-another-record-high/ch8wwePR5uE
[2] https://abcnews.go.com/Business/trumps-trade-agreement-japan/story?id=123991644
[3] https://economictimes.indiatimes.com/news/international/global-trends/trump-hails-550-billion-agreement-with-japan-as-largest-trade-deal-claims-us-to-gain-90-profits/articleshow/122848142.cms?from=mdr