[New York Stock Market] Mixed Close Amid Cautious Watch on Earnings and Trade Talks... S&P Hits Another Record High

Alphabet and Tesla Earnings in Focus on the 23rd
Trump Announces "Trade Agreement with the Philippines"
19% Tariff on Philippine Imports, 0% on U.S. Goods
U.S. and China to Discuss Tariff Reduction Extension Next Week
Semiconductor Stocks Weaken, Healthcare Shares Rise

The three major indices on the New York Stock Exchange closed mixed on July 22 (local time). Investors remained cautious, focusing on corporate earnings announcements and news regarding trade negotiations. After fluctuating throughout the session, the S&P 500 index ended with a slight gain, once again setting a new all-time high.

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On this day, the blue-chip Dow Jones Industrial Average closed at 44,502.44, up 179.37 points (0.4%) from the previous session. The large-cap S&P 500 index rose 4.02 points (0.06%) to 6,309.62, while the tech-heavy Nasdaq index fell 81.49 points (0.39%) to close at 20,892.69.

By sector, semiconductor stocks declined. Broadcom dropped 3.34%, and Nvidia slid 2.54%. A Wall Street Journal (WSJ) report stating that a $500 billion artificial intelligence (AI) project jointly pursued by SoftBank and OpenAI is facing difficulties fueled selling in semiconductor stocks. Lockheed Martin plunged 10.81% after reporting second-quarter earnings that fell short of market expectations. Philip Morris also dropped 8.43% after announcing results below market estimates. In contrast, healthcare stocks were strong, with IQVIA surging 17.88%. Amgen and Merck rose 3.32% and 2.87%, respectively.

The main focus for the market this week is the earnings announcements of major companies. The results from Alphabet, Google's parent company, and Tesla, both scheduled for release on July 23, are expected to determine the future direction of the stock market. In particular, attention is centered on the messages companies will deliver regarding AI demand and spending. So far, the earnings season, which began last week, has been progressing smoothly. According to market research firm FactSet, 88 S&P 500 companies have reported earnings, with 82% of them surpassing analysts' expectations.

Jay Hatfield, CEO of Infrastructure Capital Advisors, said in an interview with CNBC, "The market is quite stagnant," adding, "Very strong tech earnings are needed for the market to move higher." He also set a year-end target for the S&P 500 at 6,600, forecasting about 5% additional upside from current levels.

There was also a series of new developments in trade negotiations. U.S. Treasury Secretary Scott Besant said in an interview with Fox Business that the United States and China will hold a third round of high-level trade talks in Stockholm, Sweden, on July 28-29 (local time), where they plan to discuss extending the ultra-high tariff reduction measures. He stated that the previous U.S.-China tariff reduction agreement "expires on August 12" and that he plans to discuss the possibility of an extension with the Chinese side. Previously, at the first round of negotiations held in Geneva, Switzerland, in May, the two countries agreed to reduce tariffs by 115 percentage points each, resulting in the United States applying a 30% tariff and China a 10% tariff. The key issue in this round of talks is expected to be whether to extend these measures, which were implemented temporarily for 90 days. Secretary Besant also mentioned the possibility of a series of trade agreements with major countries ahead of the expiration of reciprocal tariff suspension measures on August 1.

The United States and the Philippines also reached a trade agreement. U.S. President Donald Trump announced via his own social networking service (SNS), Truth Social, that he held a summit with Philippine President Ferdinand Marcos at the White House and agreed that the United States would impose a 19% tariff on imports from the Philippines, while U.S.-made products would be exported to the Philippines tariff-free. With this trade agreement, the tariff rate the United States will apply to the Philippines from August 1 will be 19%, 1 percentage point lower than before. President Trump described the meeting as "a beautiful visit" and explained, "We will also cooperate militarily." As a result, the number of countries with which the United States has concluded trade agreements has increased to four: the United Kingdom, Vietnam, Indonesia, and now the Philippines.

U.S. Treasury yields are declining. The yield on the benchmark 10-year U.S. Treasury note, a global bond market indicator, fell 3 basis points (1 bp = 0.01 percentage point) from the previous session to 4.34%. The yield on the 2-year Treasury note, which is sensitive to monetary policy, dropped 1 basis point to 3.83%.