Dow +507.85 at 45010.29, Nasdaq +127.33 at 21018.64, S&P +49.29 at 6358.91
Nasdaq Composite: +8.9% YTD
S&P 500: +8.1% YTD
DJIA: +5.8% YTD
S&P 400: +3.12% YTD
Russell 2000: +2.38% YTD
The S&P 500 climbed 0.78% to close above 6,350, marking yet another all-time high. The move was driven by optimism over a new US-Japan trade agreement, which alleviated tariff concerns and boosted confidence across global equities.
Tech stocks, particularly those in the ‘Magnificent 7’, continued to support the rally as investors awaited results from Alphabet and Tesla. Positive expectations around AI and cloud growth have helped sustain bullish sentiment in the sector despite elevated valuations.
The VIX fell over 6%, hitting fresh multi-month lows. This suggests that market participants are becoming increasingly confident and reducing their hedging activity as trade fears subside and equities continue to rise.
Negotiations between the US, Japan, and progress with the EU on tariffs have encouraged a rotation into cyclicals, such as Industrials, Healthcare, and Energy. The US-Japan trade terms now set tariffs at 15%, down from the previously threatened 25%, which lowers recession risk. The Nasdaq added 0.43%, lagging slightly behind the S&P but remaining near its record levels. Some caution prevails ahead of significant tech earnings, but recent buy-the-dip behavior in tech persists.
GOOGL and TSLA are both about flat in after-hours after their earnings were released.
In total, nine sectors finished in positive territory, with only the defensive utilities (-0.8%) and consumer staples (-0.1%) ending the day with losses.
Bitcoin and Ethereum pulled back slightly today, as did some of the crypto miners, but not by much.
Quantum stocks were back in play and outperformed.
We have a fully stocked P&L right now, but I’m looking for a few more setups. I’m currently watching TMC. I’ll let you know if I add it.
See you in the morning.