Stock market today: Dow, S&P 500, Nasdaq eye fresh records as earnings roll in, Trump seals trade deals

US stocks, including the S&P 500, reached new highs driven by robust corporate earnings and expectations of Federal Reserve interest rate cuts. Nvidia surged to an all-time high following its CEO's optimistic AI outlook and strategic partnerships, while Microsoft gained on its OpenAI deal, and PayPal jumped 14% after beating estimates and announcing an OpenAI integration. Investors are now keenly focused on upcoming earnings from the "Magnificent Seven" tech giants, including Amazon's recent job cuts and Apple's brief $4 trillion market cap, as well as the Fed's policy meeting and ongoing US-Japan trade discussions.

Analysis

US equities, including the S&P 500 which closed above 6,800, advanced on Tuesday, nearing fresh record highs. This upward momentum was fueled by robust corporate earnings reports and strong market expectations for a second consecutive Federal Reserve interest rate cut.

The Artificial Intelligence sector remains a significant driver, with Nvidia (NVDA) shares surging over 3% to an intraday all-time high following CEO Jensen Huang's optimistic AI outlook and new partnerships, including a $1 billion stake in Nokia. Microsoft (MSFT) also climbed nearly 3% after announcing a deal allowing OpenAI to restructure and purchase $250 billion in Azure services.

Broader earnings season results provided further market support, with Wayfair (W) skyrocketing 20% on an earnings beat and 8.1% revenue growth, and PayPal (PYPL) soaring 14% after exceeding estimates and announcing an OpenAI integration. UPS (UPS) and UnitedHealth (UNH) also reported strong results, contributing to the positive sentiment.

Investor focus now shifts to the upcoming earnings from the "Magnificent Seven" tech companies, which represent a significant portion of the S&P 500, particularly Amazon (AMZN) following its 14,000 job cuts and Apple (AAPL) after briefly reaching a $4 trillion market cap. The ongoing Fed meeting and Chair Powell's commentary on future rate cuts will provide additional market direction.

Key Decisions for Investors

• Closely monitor upcoming "Magnificent Seven" earnings, particularly for Amazon (AMZN) given its recent job cuts, as these reports will significantly influence overall market direction.
• Evaluate exposure to the AI sector, considering Nvidia's continued market leadership and Microsoft's strategic AI investments, while acknowledging increasing competition from players like Qualcomm.
• Assess the implications of potential Federal Reserve interest rate cuts on growth-oriented sectors and overall market liquidity, paying close attention to Chair Powell's forward guidance.
• Consider diversifying portfolios beyond mega-cap tech, noting strong performance and positive outlooks from companies like Wayfair (W), UPS (UPS), and UnitedHealth (UNH) in other sectors.