S&P 500 and Nasdaq Surge to Record Highs Ahead of Big Tech Earnings

New York (Yonhap News) – Wall Street soared to new peaks on July 21, buoyed by optimism surrounding second-quarter earnings. Both the S&P 500 and the Nasdaq Composite closed at all-time highs, reflecting positive sentiment among investors.

On the New York Stock Exchange, the benchmark S&P 500 climbed 8.81 points, or 0.14%, to close at a milestone of 6,305.60. The tech-focused Nasdaq advanced 78.51 points, or 0.38%, ending the session at 20,974.17. Conversely, the Dow Jones Industrial Average, a collection of 30 blue-chip stocks, edged down 19.12 points, or 0.04%, to settle at 44,323.07 during a muted trading day.

For the first time in history, the S&P 500 ended above the 6,300 benchmark, while the Nasdaq celebrated its sixth consecutive record close.

Optimism Skyrockets on Strong Earnings Reports

With the second-quarter earnings season in full swing, robust corporate results have played a pivotal role in driving market optimism. Last week, major U.S. banks exceeded Wall Street expectations, setting a positive tone. Meanwhile, telecommunications leader Verizon impressed the market with stronger-than-anticipated results, propelling its stock 4.04% higher.

According to a FactSet report, 62 S&P 500 companies have released Q2 earnings so far, with over 85% exceeding analyst forecasts. These encouraging figures have fostered hope for equally strong performances from other firms this earnings season, though concerns around the market’s high valuations continue to curb more extensive gains.

Big Tech Earnings Take Center Stage

The technology sector remains the focal point as investors brace for major earnings reports. Notably, Alphabet, the parent company of Google, saw a 2.72% rise in Class A shares ahead of its highly anticipated July 23 earnings announcement. According to John Butters, a senior analyst at FactSet, Big Tech firms within the much-discussed “Magnificent Seven” are expected to post an impressive 14% year-over-year rise in earnings per share.

Block, the financial services innovator founded by Jack Dorsey, soared 7.22% following its addition to the S&P 500 index. Elsewhere, Trump Media, the parent company of Truth Social and backed by former President Donald Trump, climbed 3.11% after revealing it had acquired Bitcoin (BTC) worth an astounding $20 trillion—a move that caught the attention of both investors and cryptocurrency enthusiasts alike.

Trade Negotiations and Policy Developments

In tandem with earnings updates, market participants closely monitored trade policy developments. U.S. officials reaffirmed August 1 as the target deadline for ongoing tariff negotiations, though they hinted at potential extensions for talks. U.S. Commerce Secretary Howard Lutnick noted during a CBS interview that post-deadline discussions remain on the table, while Treasury Secretary Scott Besant underscored the importance of securing “high-quality agreements” rather than expediting processes during a separate CNBC interview.

Expert Insights on Market Health

Analysts generally expressed cautious optimism about corporate performance so far this quarter. Tom Hainlin, an investment strategist at U.S. Bank Wealth Management, highlighted the resilience of corporate earnings, stating, “The companies that have reported earnings so far have generally met or exceeded their previous guidance. We haven’t seen any indications of declining corporate profits or waning consumer spending.”

Despite this optimistic outlook, concerns about lofty market valuations continue to weigh on investor sentiment. As Wall Street remains focused on corporate earnings and key trade negotiations, market participants are balancing optimism with caution amid a dynamic economic landscape.

Conclusion

As the S&P 500 and Nasdaq achieve unprecedented levels, Big Tech earnings and crucial policy developments are expected to steer market trends in the coming weeks. While the current environment brims with optimism, underlying valuation concerns serve as a reminder for investors to tread carefully.