U.S. equity markets climbed on Wednesday, buoyed by optimism surrounding a new trade agreement between the United States and Japan. Investors also turned their attention to upcoming earnings reports from tech heavyweights Tesla and Alphabet.

As of 09:35 ET, the Dow Jones Industrial Average was up 245 points (0.6%), the S&P 500 gained 23 points (0.4%), and the NASDAQ Composite added 50 points (0.2%).

Trump Unveils U.S.-Japan Trade Agreement

President Donald Trump announced via social media that his administration had finalized a “massive” trade deal with Japan. The agreement includes a 15% tariff on Japanese imports—lower than the 25% previously threatened.

According to Trump, Japan has also committed to investing $550 billion in the U.S. and will open its markets further to American-made automobiles and agricultural products, including rice. The deal marks a step forward in trade negotiations ahead of an August 1 deadline for potential new tariffs.

However, tariffs remain a source of market uncertainty. Analysts and Federal Reserve officials continue to warn that ongoing trade tensions could contribute to rising inflation in the months ahead.

Tesla, Alphabet Set to Report Earnings

Tesla (NASDAQ: TSLA) and Alphabet (NASDAQ: GOOGL) are scheduled to release their second-quarter earnings after the close. The two companies are the first of the so-called “Magnificent Seven” to report this season and are expected to offer key insights into broader market trends.

Tesla’s report will be closely watched for updates on profit margins, amid slowing global vehicle sales and aggressive pricing strategies—particularly in China, where competition is intensifying. The company’s AI and robotics developments, highlighted by CEO Elon Musk as the next drivers of growth, will also be in focus.

Alphabet’s results will be scrutinized for signs of strength in its AI-related businesses and top-line growth. Investors will look for updates on the company’s AI infrastructure investments, as Alphabet continues to position itself as one of Wall Street’s major AI hyperscalers.

Corporate Movers

• AT&T (NYSE: T) fell after reporting better-than-expected Q2 financials but missing forecasts for internet subscriber growth.
• Texas Instruments (NASDAQ: TXN) declined after issuing a weaker profit forecast, citing soft demand for analog chips and concerns over tariff-related supply chain disruptions.
• Hasbro (NASDAQ: HAS) jumped after strong Q2 results, powered by record performance in its Magic: The Gathering franchise.
• GE Vernova (NYSE: GEV) rose after beating earnings estimates and raising full-year guidance, citing strong demand for power and grid infrastructure.
• Hilton Worldwide (NYSE: HLT) slipped as system-wide revenue per available room (RevPAR) dropped 0.5% year-over-year on a currency-neutral basis, due to modest declines in occupancy.

So far, around 17% of S&P 500 companies have reported this earnings season, with approximately 85% beating Wall Street expectations.

Oil Prices Edge Lower

Oil prices slipped in early trade Wednesday, giving back initial gains following the U.S.-Japan trade announcement.

By 09:35 ET, Brent crude was down 0.4% at $68.31 per barrel, while West Texas Intermediate (WTI) dipped 0.4% to $65.05.

The American Petroleum Institute reported a surprise draw of 577,000 barrels in U.S. crude inventories for the week ending July 18, following the previous week’s sharp 19.1-million-barrel build. If confirmed by official data later in the day, the drop could suggest a rebound in fuel demand amid the summer travel season.

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