Wall St rises on US-EU trade deal prospects; Intel falls

The S&P 500 and Nasdaq reached record highs on Friday, fueled by optimism for an imminent U.S.-EU trade deal and robust corporate earnings. Deckers Outdoor surged 12% on strong quarterly results, while Intel tumbled 9% after forecasting steeper losses and announcing job cuts. The market's recent rally, driven by trade deal expectations and positive earnings, now shifts focus to the Federal Reserve's upcoming meeting for potential interest rate decisions.

Analysis

The S&P 500 and Nasdaq advanced to record highs, primarily driven by investor optimism for a forthcoming U.S.-EU trade deal, with European and U.S. officials scheduled to meet over the weekend. This rally extends recent gains fueled by other trade agreements and a positive earnings season, evidenced by market breadth where advancing issues outnumbered decliners by a 2-to-1 ratio and leadership from trade-sensitive sectors like Industrials (+0.91%) and Materials (+0.87%). However, this optimism is tempered by professional skepticism, as voiced by GLOBALT's Senior Portfolio Manager, who warned of significant disappointment risk if a deal does not materialize. The market displayed sharp divergence at the individual stock level: Deckers Outdoor surged 12% on strong quarterly results and international demand, while chipmaker Intel plummeted 9% after forecasting wider losses and job cuts. Other notable movers included Centene, which rose nearly 6% on positive 2026 profitability guidance, and Paramount Global, which dipped 1.5% following regulatory approval of its merger. Investor focus is now shifting to the Federal Reserve's meeting next week, where rates are expected to remain steady, though markets are pricing a 60% probability of a rate cut by September.

Key Decisions for Investors

• Monitor the outcome of the U.S.-EU trade negotiations this weekend, as the market's record highs are heavily predicated on a positive result, creating downside risk if a deal is not reached.
• Focus on stock-specific fundamentals rather than broad market momentum, as demonstrated by the starkly different performance of Deckers (DECK) and Intel (INTC) following their respective corporate announcements.
• Pay close attention to the Federal Reserve's commentary next week for any shifts in its assessment of tariffs and inflation, as this will be a key determinant for the future path of interest rates.
• Consider the opposing signals between the market's bullish run and the cautious outlook from some portfolio managers, suggesting it may be prudent to protect gains or hedge against a potential sentiment reversal.