Trade Deal News May Lead To Initial Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Wednesday, with stocks likely to move to the upside after ending the previous session mixed.

The upward momentum on Wall Street comes after President Donald Trump announced trade deals with Japan and the Philippines.

The "largest ever" U.S. trade deal with Japan features a 15 percent tariff on Japanese exports and includes a commitment from Tokyo to invest $550 billion in the United States and open its markets for American vehicles, rice, and other agricultural goods.

Trump claimed the U.S. would receive 90 percent of profits from the agreement and that the pact could generate hundreds of thousands of American jobs.

According to Trump, the new trade pact with the Philippines would make the county an open market with zero tariffs on U.S. goods, but with Manila paying a 19 percent duty.

The announcement of these trade deals spurred expectations of further trade agreements as the August 1st deadline nears.

After coming under pressure early in the session, stocks regained ground over the course of the trading day on Tuesday. The major averages climbed well off their worst levels of the day before eventually ending the session narrowly mixed.

While the tech-heavy Nasdaq fell 81.49 points or 0.4 percent to 20,892.69, the S&P 500 inched up 4.02 points or 0.1 percent to 6,309.62 and the Dow climbed 179.37 points or 0.4 percent to 44,502.44.

Profit taking contributed to the initial weakness on Wall Street after the Nasdaq and the S&P 500 ended the previous session at record closing highs, with a negative reaction to some of the latest earnings news also weighing on the markets.

Shares of General Motors (GM) plunged by 8.1 percent after the automaker reported second quarter earnings that exceeded analyst estimates but were down sharply year-over-year.

Leading global security, defense and aerospace contractor Lockheed Martin (LMT) also tumbled by 10.8 percent after reporting weaker than expected second quarter revenues.

Overall trading activity was somewhat subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

Traders were also looking ahead to the release of quarterly results from Google parent Alphabet (GOOGL) and electric car maker Tesla (TSLA) after the close of trading on Wednesday.

Housing stocks showed a substantial move to the upside on the day, driving the Philadelphia Housing Sector Index up by 6.7 percent to its best closing level in over five months.

D.R. Horton (DHI) helped lead the sector higher, soaring by 17 percent after reporting better than expected fiscal third quarter results.

Significant strength was also visible among gold stocks, as reflected by the 3.1 percent jump by the NYSE Arca Gold Bugs Index. With the gain, the index reached its best closing level in over twelve years.

Oil service, biotechnology and steel stocks also saw considerable strength, while semiconductor, networking and computer hardware stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are slipping $0.24 to $65.07 a barrel after falling $0.64 to $65.31 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $3,437, down $6.70 compared to the previous session's close of $3,443.70. On Tuesday, gold surged $37.30.

On the currency front, the U.S. dollar is trading at 146.47 yen compared to the 146.63 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1722 compared to yesterday's $1.1754.

Asia

Asian stocks closed mostly higher on Wednesday after U.S. President Donald Trump announced trade agreements with Japan and the Philippines, easing concerns about the tariff war.

The "largest ever" U.S. trade deal with Japan features a 15 percent tariff on Japanese exports and includes a commitment from Tokyo to invest $550 billion in the United States and open its markets for American vehicles, rice, and other agricultural goods.

Trump claimed the U.S. would receive 90 percent of profits from the agreement and that the pact could generate hundreds of thousands of American jobs.

According to Trump, the new trade pact with the Philippines would make the county an open market with zero tariffs on U.S. goods, but with Manila paying a 19 percent duty.

The announcement of these trade deals spurred expectations of further trade agreements as the August 1st deadline nears.

Investors also cheered comments from U.S. Treasury Secretary Scott Bessent backing Fed Chair Jerome Powell.

Bessent said there's no need for Powell to step down before his term ends in May but argued he has a chance to cement his legacy by reforming the Fed's non-monetary functions.

The yen tested a two-week high against the dollar on Trump's announcement of the trade deal with Japan.

Gold dipped from a five-week high, while oil rose on industry data indicating strong U.S. demand.

China's Shanghai Composite Index finished marginally higher at 3,582.30 after reports emerged that the U.S. and China will meet in Stockholm next week to discuss extending their tariff truce.

Hong Kong's Hang Seng Index jumped 1.6 percent to 25,538.07, extending gains for a fourth straight session.

Japanese markets rallied as automakers surged on reduced U.S. imports levy. The Nikkei 225 Index spiked 3.5 percent to 41,171.32, rising to a one-year high.

The broader Topix Index surged 3.2 percent to 2,926.38. Nissan Motor, Honda Motor, Toyota and Mitsubishi Motors soared 8-14 percent.

Longer-term Japanese government bond yields climbed, with the 10-year yield hitting the highest since 2008 at 1.6 percent on speculation that the Bank of Japan will resume raising interest rates in the wake of reduced uncertainty surrounding the economy.

In addition, media reports suggested that embattled Prime Minister Shigeru Ishiba was preparing to step down in response to the weekend election results.

Seoul stocks eked out modest gains in cautious trade ahead of the last-minute talks with the United States on its sweeping tariff scheme.

The Kospi rose 0.4 percent to 3,183.77, with tech shares surging ahead of earnings results from the so-called Magnificent Seven companies.

Australian markets closed higher, with mining and energy stocks surging to multi-month highs. The benchmark S&P/ASX 200 Index climbed 0.9 percent to 8,737.20- leaving it just shy of a record high.

The broader All Ordinaries Index settled 0.7 percent higher at 9,001.40. Woodside Energy rose 1.5 percent after beating quarterly sales forecasts.

Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index closed down 0.3 percent at 12,794.06, extending losses for a second consecutive session.

Europe

European stocks have moved mostly higher during trading on Wednesday after three straight sessions of losses. Focus shifted to potential trade agreements after U.S. President Donald Trump announced trade deals with Japan and the Philippines.

The prospects of an EU-U.S. trade agreement improved after Trump said EU representatives would come for trade negotiations on Wednesday.

"We have Europe coming in tomorrow, and the next day, we have some other ones coming in," Trump said late on Tuesday, without specifying details.

The French CAC 40 Index is up by 1.2 percent, the German DAX Index is up by 0.7 percent and the U.K.'s FTSE 100 Index is up by 0.5 percent.

Shares of Dutch telecommunications provider Koninklijke KPN NV fell nearly 2 percent after declaring its Q2 and H1 2025 results.

Recruiter Randstad NV dropped 1.8 percent despite reporting Q2 core profit in line with expectations.

Computer chip equipment maker ASM International plummeted 8.5 percent after second-quarter bookings fell short of expectations.

Lonza Group AG shares surged 5 percent. The Swiss contract drug manufacturer reported 23 percent growth in its half-year core profit, beating market expectations.

Pharma giant Roche Holding AG rose 1.4 percent after pausing some shipments of the controversial gene therapy Elevidys.

Stora Enso Oyj shares were up almost 6 percent. The Finnish forestry group reported better-than-expected second-quarter operating earnings despite a volatile demand environment.

French train maker Alstom rallied 4 percent as first-quarter sales topped estimates.

Defense and aerospace group Thales fell 2 percent after order intake in the first half of 2025 declined 4 percent on a reported basis and organically.

Automaker Renault Group climbed 3.7 percent after vehicle sales rose by 1.3 percent in the first half of the year.

Informa, an international events and academic publishing group, jumped 5.7 percent after raising its full-year revenue guidance.

German software maker SAP tumbled 3 percent. The company maintained its full-year targets despite reporting higher quarterly sales and earnings.

U.S. Economic News

The National Association of Realtors is scheduled tor release its report on existing home sales in the month of June at 10 am ET. Existing home sales are expected to slip to an annual rate of 4.01 million in June after climbing to a rate of 4.03 million in May.

At 10:30 am ET, the Energy Information Administration is due to release its report on crude oil inventories in the week ended July 18th. Crude oil inventories are expected to decrease by 1.4 million barrels after falling by 3.9 million barrels in the previous week.

The treasury Department is scheduled to announce the results of this month's auction of $13 billion worth of twenty-year bonds at 1 pm ET.