US Stocks Log Fifth Straight Record as Trade Optimism and Earnings Fuel Market Momentum
US equity markets closed the week on a high note, with the S&P 500 rising 0.4% on last Friday, marking its fifth consecutive record close the longest such streak in more than a year. The Nasdaq 100 advanced 0.2%, after hitting another intraday high, while the Dow Jones Industrial Average jumped 208 points (+0.5%), buoyed by renewed confidence in global trade progress and strong corporate earnings from key blue-chip firms.
Trade Developments Drive Sentiment
Markets were primarily uplifted by growing optimism around international trade negotiations. President Trump is scheduled to meet European Commission President Ursula von der Leyen on Sunday, sparking hopes of a US–EU trade agreement ahead of the August 1 tariff deadline. Investors viewed the timing of this high-level dialogue as a potential signal of diplomatic progress, especially after reports confirmed trade deals were reached with Japan, Indonesia, and the Philippines. These agreements are widely seen as efforts to consolidate geopolitical alliances in Asia and reduce exposure to supply chain risks associated with China.
However, negotiations with Canada have stalled, with US officials citing disagreements over digital services taxation and agri-export quotas. While this poses short-term uncertainty, analysts suggest it has been priced in, and resolution is expected in Q3 given Canada’s dependence on US trade access.
Earnings Season Supports Momentum
Positive corporate earnings reinforced the bullish tone. Alphabet (Google’s parent) and Verizon posted better-than-expected quarterly results, beating both top-line and bottom-line estimates. Alphabet’s results were boosted by strong ad revenue and AI-driven cloud services, while Verizon’s solid subscriber growth and disciplined cost management impressed investors. Both stocks saw strong upward momentum, lifting sentiment across the communication services and tech sectors.
In contrast, Intel disappointed markets, issuing a profit warning and announcing layoffs in its PC division, citing weak enterprise demand and overcapacity in chip inventories. The news pulled down semiconductor stocks broadly, though the tech-heavy Nasdaq still managed to eke out gains.
Weekly Market Performance
For the week, major indices performed strongly:
S&P 500: +1.6%
Nasdaq 100: +1.2%
Dow Jones: +1.3%
These figures reflect broad-based buying supported by dovish monetary expectations, robust earnings, and a tentative stabilization in the global trade landscape. Defensive sectors like healthcare and utilities were flat, while cyclicals (industrials, consumer discretionary, tech) outperformed.
Upcoming Catalysts: Fed & Big Tech
Markets now turn to two pivotal drivers for next week:
Federal Reserve Meeting: Investors are watching closely for signals of a potential rate cut as early as September, especially after this week’s revised GDP print showed a 0.5% contraction in Q1, raising alarms about underlying economic momentum. While the Fed is expected to hold rates steady in July, dovish forward guidance could further fuel risk-on sentiment.
Mega-Cap Earnings (Apple, Meta, Microsoft): Scheduled to report next week, these firms represent over 15% of the S&P 500’s total market cap. Investor focus will center on AI-driven revenue growth, digital advertising recovery, and software licensing outlooks. Any beats could extend the rally into August, while misses may trigger short-term corrections, particularly in tech.
Policy and Market Crosscurrents
Despite the strong week, underlying risks persist:
Tariff volatility remains high, especially with Trump’s recent threat of a 50% tariff on copper, which may spill over into broader industrial costs.
US fiscal expansion under the new tax-and-spend proposal may boost growth, but bond markets have begun pricing in future inflation risk, nudging 10-year Treasury yields higher mid-week before easing on dovish Fed bets.
Geopolitical concerns persist, including tensions with Vietnam over new 20% duties, and Canada’s temporary withdrawal from digital trade talks.
Conclusion
Friday’s close reflects a market increasingly confident in the resilience of the US economy amid external shocks. Five consecutive record closes for the S&P 500 highlight how investors are leaning into equities despite trade, inflation, and geopolitical uncertainties. With the Fed and tech earnings on deck, the next week will be a critical test of whether this rally can sustain—or whether rate sensitivity and macro fragility might start to reassert themselves.
Sources
Bloomberg (2025). US Market Close: July 25, 2025 Summary.
Reuters (2025). Earnings and Trade Optimism Propel US Stocks to Record Highs.
Wall Street Journal (2025). Trump to Meet EU Chief on Tariffs; Deals Finalized with Asia Partners.
CNBC (2025). Alphabet, Verizon Lift Tech Sentiment; Intel Warns on Outlook.
US Census Bureau. (2025). US GDP Q1 Third Estimate.
Federal Reserve. (2025). FOMC Preview – July Meeting.
S&P Global. (2025). Weekly Sector Performance Report.