US stocks surged on Wednesday as investors responded to signs of progress in US trade negotiations ahead of an August 1 tariff deadline. The Dow Jones Industrial Average jumped 507 points, or 1.14%, to finish at 45,010.29, just shy of a record. The S&P 500 rose 0.78% to 6,358.91, marking its 12th record close of the year, while the Nasdaq Composite advanced 0.61% to close above the 21,000 threshold for the first time.
The gains were fuelled by optimism that the US is closing in on additional trade agreements, including a possible deal with the European Union. Reports from the Financial Times and Bloomberg suggested that negotiations are nearing completion, with a 15% reciprocal tariff arrangement that mirrors the recently announced US-Japan deal.
President Trump announced the Japanese agreement via Truth Social on Tuesday night, describing it as a “massive Deal” and confirming that discussions with European officials are ongoing.
This marks a continuation of the administration’s broader push to finalise multiple trade agreements before the self-imposed August deadline. Earlier this week, the White House confirmed a framework deal with Indonesia, following recent agreements with the UK and China.
Speculative buying lifts smaller names
Wednesday’s rally extended a multi-day winning streak for the S&P 500 and helped ignite risk appetite among retail investors. Smaller, heavily shorted companies with well-known brands saw sharp moves, Krispy Kreme and GoPro both jumped, following a surge in Kohl’s the previous session.
Alphabet soars on AI growth as Tesla stumbles on sales
Alphabet (NASDAQ:GOOGL) beat Q2 expectations with US$96.43bn in revenue and strong AI-driven growth, lifting its 2025 capex forecast to US$85bn. Net income rose 20% to US$28.2bn, while Google Cloud and YouTube ad revenue exceeded estimates. In contrast, Tesla (NASDAQ:TSLA) missed forecasts as Q2 revenue fell to US$22.5bn and vehicle deliveries dropped 14%, with net income slipping to US$1.17bn amid growing competition and regulatory pressures.
Australian Sharemarket
ASX futures point to a modestly positive open, up 14 points to 8712. Optimism was bolstered by news of EU-US trade progress and the Australian government’s move to lift restrictions on US beef imports.
Looking ahead
Today’s agenda includes earnings from Fortescue, Lynas Rare Earths, and Sandfire Resources, along with Macquarie Group’s AGM in Sydney. RBA Governor Michele Bullock will speak on the central bank’s dual mandate this afternoon, and PMI data is due from key global economies. The European Central Bank meets tonight, with President Christine Lagarde scheduled to speak post-decision.
