[New York Stock Exchange] S&P, Nasdaq Hit New Highs on Big Tech Earnings Optimism... Alphabet Up 2.8%

Alphabet and Tesla to Announce Earnings on the 23rd
"Magnificent 7 Net Profit Up 14%... S&P Average 3.4%"
US Treasury: "Trade Deal Quality Matters More Than Timing"
Both Tariff Implementation and Extension Remain Possible
Powell to Speak on the 22nd... Will He Hint at Future Rate Path?

On the New York Stock Exchange, both the S&P 500 and the Nasdaq indices once again reached record highs. Optimism surrounding the upcoming earnings reports from big tech companies this week lifted the market, overshadowing uncertainties related to tariff policies.

UPI Yonhap News

On this day, the blue-chip Dow Jones Industrial Average closed at 44,323.07, down 19.12 points (0.04%) from the previous session. The large-cap S&P 500 rose 8.81 points (0.14%) to finish at 6,305.6, while the tech-heavy Nasdaq climbed 78.52 points (0.38%) to end at 20,974.17.

Investors are hopeful that the second-quarter earnings announcements scheduled for this week will confirm the resilience of the U.S. economy. According to market research firm FactSet, 62 S&P 500 companies have reported earnings so far, and 85% of them have exceeded analysts' expectations. Bank of America (BoA) analyzed that the first week of the earnings season showed a 5% year-over-year profit growth for reporting companies.

There is growing optimism that the big tech earnings, starting with Alphabet (Google's parent company) and Tesla on the 23rd, will add momentum to a strong start to the earnings season. FactSet projects that the second-quarter net profit of the so-called "Magnificent 7" (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla) will increase by 14% compared to the same period last year. This is four times higher than the average net profit growth of the remaining 493 S&P 500 companies (3.4%).

On Wall Street, there are also predictions that the S&P 500 could rise by more than 10% in the second half of the year, driven by the strength of big tech stocks.

Christopher Harvey, head of equity strategy at Wells Fargo, said in a Bloomberg interview on this day, "The winners keep winning, as mega-cap companies continue to expand their margins and market share." He also projected, "The growth trend in artificial intelligence (AI) will continue over the long term," and predicted that the S&P 500 will rise by a double-digit percentage in the second half of the year.

Max Kettner, chief multi-asset strategist at HSBC Holdings, stated, "There is still some additional upside potential for the U.S. stock market," adding, "It is important to remember that this earnings season began with very low expectations."

Comments from U.S. Treasury Secretary Scott Besant, who left open the possibility of extending the tariff suspension, also helped ease concerns over trade policy. In an interview with CNBC on this day, Secretary Besant said regarding the possibility of extending the tariff suspension set to expire on August 1, "We have to wait for the President's decision." He added, "However, if we return to tariffs on August 1, higher tariffs will put greater pressure on other countries to reach a better agreement." His remarks were interpreted as leaving open the possibility of either tariffs taking effect or an extension of the suspension next month. Secretary Besant also said, "What matters is the quality of the trade agreement, not the timing," and emphasized, "We will not rush to conclude an agreement." U.S. Commerce Secretary Howard Lutnick also confirmed this stance. The previous day, Secretary Lutnick described August 1 as a "hard deadline," but also remarked, "That does not mean they cannot continue to talk with us afterward," indicating that trade negotiations with major trading partners will continue.

Another key point to watch is the speech by Jerome Powell, Chair of the U.S. Federal Reserve, scheduled for July 22. Ahead of the Federal Open Market Committee (FOMC) regular meeting on July 29-30, there is keen interest in what Powell will say in his final public remarks regarding inflation, employment, and the path of interest rates. Despite persistent calls from President Trump for rate cuts, Powell has maintained a rate freeze stance, citing concerns about tariff-induced inflation. With the White House repeatedly raising and then retracting the possibility of dismissing Powell, attention is also focused on whether he will address this issue.

U.S. Treasury yields are trending lower, especially for longer-term bonds. The 10-year Treasury yield, which serves as a global benchmark, fell 5 basis points (1bp=0.01 percentage point) from the previous session to 4.37%. The 2-year Treasury yield, which is sensitive to monetary policy, declined by 1 basis point to 3.86%.

By stock, Meta Platforms, the parent company of Facebook, rose 1.23%. Amazon climbed 1.43%. Alphabet, which is set to report earnings this week, jumped 2.8%, while Tesla fell 0.35%. Block, a major U.S. fintech (finance + technology) company, soared 7.22% ahead of its inclusion in the S&P 500 on the 23rd. Verizon, a telecommunications company, gained 4.04% on strong second-quarter earnings.