The S&P 500 and the Nasdaq Composite achieved record closes on Thursday, buoyed by Alphabet’s latest quarterly results, which exceeded expectations. The broad market index experienced a modest increase of 0.07%, concluding at 6,363.35, while the tech-centric Nasdaq saw a slight uptick of 0.18%, finishing at 21,057.96. Both indexes significantly reduced their gains as the session concluded. The Dow Jones Industrial Average experienced a decline of 316.38 points, representing a decrease of 0.70%, ultimately closing at 44,693.91. The 30-stock Dow experienced a decline, primarily influenced by IBM shares, which fell over 7% following a second-quarter software revenue report that did not meet expectations.
Both the S&P 500 and the Nasdaq achieved new intraday all-time highs earlier in the session, supported by a 1% increase in Alphabet shares following the parent company’s second-quarter earnings and revenue surpassing expectations. “Given the size and influence of big tech and artificial intelligence, I think the Alphabet results were a nice little tailwind for a market that’s constantly asking the question of whether all the AI spend is going to have solid return on investment or whether this can continue,” Ross Mayfield, investment strategist at Baird, said to CNBC. “At the outset of earnings season, Alphabet has presented a favorable data point indicating a positive outcome.”
In conjunction with IBM, the overall gains were moderated by a decline in Tesla, which experienced an 8% decrease following a consecutive drop in auto revenue for the second quarter. Market participants have shifted their focus to the continuing conflict between President Donald Trump and the Federal Reserve. The White House announced that Trump is scheduled to visit the Fed on Thursday, intensifying his efforts to exert pressure on Chairman Jerome Powell.
This marks the inaugural occasion in almost twenty years that a sitting American president will undertake an official visit to the central bank. The market is exhibiting a robust performance following Wednesday’s developments, driven by advancements in trade negotiations, as evidenced by the S&P 500 achieving its 12th record close of the year and the Nasdaq Composite surpassing the 21,000 mark for the first time.
Equities received a boost from a Financial Times report indicating that the United States was making gradual progress towards a trade agreement with the European Union. Bloomberg has verified the advancement, referencing diplomats who have been informed about the discussions. This trade agreement would increase tariffs to 15% on imports originating from the EU. “If the administration feels emboldened to come out on Aug. 1 and raise tariffs on any country we don’t have a deal with, that’s going to be a risk-off event,” Mayfield also said. “The market anticipates a resolution that does not significantly hinder growth.”