US indices reach fresh highs as trade deal calms nerves
S&P 500 and Nasdaq extend gains to record territory while UK markets show resilience despite sterling weakness.
Modest gains mask underlying strength across markets
The S&P 500's minimal 0.02% gain to fresh record highs tells a story of quiet confidence rather than explosive momentum. While the move appears modest, the ability to push through to new territory suggests the underlying trend remains intact.
The Nasdaq 100's 0.33% advance proved more convincing, driven by renewed optimism around megacap earnings prospects. This divergence between the indices highlights the market's continued preference for growth over value in the current environment.
Across the Atlantic, the FTSE 100's 0.1% gain demonstrates similar resilience, with the index recovering some ground from yesterday's selloff. The FTSE 250 remained flat, suggesting a more cautious approach among mid-cap investors.
UK earnings provide mixed signals
AstraZeneca helped drive the FTSE higher with strong second-quarter (Q2) results, particularly in its oncology franchise which delivered $6.3 billion in revenue. The pharmaceutical giant's performance exceeded analyst expectations, though tariff uncertainty from President Trump continues to weigh on the sector.
Barclays provided an intriguing case study in market reaction, with shares initially climbing 1% before reversing to fall 1.4%. Despite beating expectations with strong investment banking revenue and announcing a £1 billion share buyback, analysts noted the beat was driven by specific divisions while overall revenue missed estimates.
Other UK results painted a mixed picture. Greggs saw revenue rise 7% but profit fell on higher costs, while student housing firm Unite posted a 15% earnings rise as record numbers head to university. Games Workshop highlighted tariff concerns, noting potential £12 million impact if "nothing is done".
Trade framework provides welcome relief
The agreement to halve planned import duties to 15% represents a significant de-escalation in transatlantic trade tensions. Markets responded positively despite France's criticism of the deal as "submission".
The framework provides much-needed clarity for businesses operating across the Atlantic. This reduction in uncertainty should support continued investment decisions that have been on hold pending policy clarity.
Meanwhile, the resumption of Chinese-US trade talks in Stockholm offers another potential catalyst, despite Trump's hints at wider global tariffs supporting risk appetite.
Fed decision looms large
Market expectations for the Federal Reserve (Fed) to maintain rates appear well-founded, but attention will turn to inflation pressures and upcoming payrolls data.
Nike's 3.9% surge following J.P. Morgan's "just buy it" upgrade demonstrates how individual stock selection remains crucial.
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