Markets Rally as U.S.-Japan Trade Deal Sparks Optimism

U.S. stock index futures surged on Wednesday following a pivotal trade deal between President Donald Trump and Japan. The agreement, which lowers tariffs on Japan's auto sector from 27.5% to 15%, buoyed market sentiment as further trade accords are anticipated ahead of the August 1 deadline.

Benchmark indices shot up, with the S&P 500 closing at an all-time high for the eighth time in nearly a month. This was driven by diminishing trade tensions, solid U.S. economic indicators, and generally positive second-quarter earnings. However, losses in tech giants like Meta and Microsoft dragged down the Nasdaq.

Investors are keenly observing earnings from the "Magnificent Seven" stocks, including Tesla and Alphabet, as market enthusiasm around AI grows. Meanwhile, Texas Instruments' disappointing profit forecast impacted the chip sector, and General Motors reported significant quarterly earnings losses due to tariffs.

(With inputs from agencies.)