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Market Poised for Weekly Gains Despite Thursday Dip; Earnings and Trade deals Fuel Rally

Major U.S. stock averages are on track to close the week with positive momentum,even after experiencing losses on Thursday.The Dow Jones Industrial Average and the nasdaq Composite are both anticipating an approximate 1% weekly advance, while the S&P 500 has seen a rise of about 1.1% week to date.

This upward trend, which has propelled the market to all-time highs, has been significantly bolstered by a robust earnings season. Notably,Alphabet (GOOGL) delivered a better-than-expected earnings report,contributing to the positive sentiment. So far, approximately 83% of the 155 S&P 500 companies that have reported their results have surpassed Wall Street’s expectations.

Keith buchanan, senior portfolio manager at Globalt Investments, commented on CNBC’s “Power Lunch” that for the rally to sustain its upward trajectory, it needs to broaden its base or demonstrate more consistent performance across the wider market.

Recent trade agreements have also played a crucial role in driving the market to new peaks. Earlier this week, President Donald Trump announced a substantial trade deal with Japan, which includes reciprocal tariffs of 15%. Additionally, the U.S. and Indonesia have reached an agreement on the framework of a trade accord. Investors are now closely monitoring for any further trade announcements ahead of the Trump governance’s August 1 tariff deadline.

Looking ahead, the Federal Reserve is scheduled to convene next week. Policymakers are widely anticipated to maintain the current target range for interest rates, which stands between 4.25% and 4.5%.

President Trump, who has previously advocated for lower interest rates and has been vocal in his pressure on Fed Chairman Jerome Powell, engaged in a public exchange with powell regarding renovation costs during a historic visit to the Federal Reserve’s headquarters on Thursday. During the visit, Trump presented a cost figure for renovations that Powell publicly corrected as inaccurate.

Following the tour of the renovations, President Trump appeared to moderate his stance on the Fed chief, stating that he was not planning to dismiss him, a prospect that had previously caused market concern. Trump remarked, “To do that is a big move, and I just don’t think its necessary. And I believe that he’s going to do the right thing.”