The S&P 500 and Nasdaq hit record highs on Wednesday, lifted by strong performances from Nvidia and GE Vernova, as optimism around a potential U.S.-EU trade deal bolstered investor confidence.
According to two EU diplomats, the Biden administration is advancing a trade agreement with the European Union that mirrors the Trump-era deal with Japan. The prospective framework includes a 15% broad tariff on EU imports, possibly extending to automobiles.
The S&P 500 rose 0.78%, closing at 6,358.91 points, while the Nasdaq climbed 0.61% to 21,020.02. The Dow Jones Industrial Average added 1.14%, finishing at 45,010.29, just shy of its December record.
Tech stocks continued to lead the rally. Nvidia gained 2.25%, reinforcing its leadership in the AI chip sector. GE Vernova soared 14.6% to an all-time high after raising its revenue and free cash flow forecasts and beating Wall Street’s Q2 profit expectations. The company is up over 80% in 2025, driven by surging energy demand from AI and crypto data centers.
Tesla edged up 0.14% ahead of its Q2 earnings call, with analysts expecting a revenue decline due to intensifying competition, a stagnant model lineup, and public backlash against CEO Elon Musk. “What you will hear is an awful lot of discussion about the future and a broad acknowledgement that this was a terrible quarter,” said Michael Green of Simplify Asset Management.
Meanwhile, Alphabet dipped 0.58% ahead of its own earnings report. Analysts forecast a 7.5% increase in Q2 earnings for S&P 500 companies, largely driven by tech giants like Microsoft and Nvidia.
Thermo Fisher surged 9% after beating profit and revenue estimates. In contrast, Texas Instruments tumbled 13% after forecasting weaker demand for analog chips, citing tariff-related uncertainty. The news dragged down other analog chipmakers, including NXP Semiconductors, Analog Devices, and ON Semiconductor, which fell between 1% and 4.6%.
Despite economic concerns, including a larger-than-expected drop in U.S. existing home sales, Wall Street sentiment remained resilient. The CBOE Volatility Index—Wall Street’s fear gauge—dropped to a five-month low. Traders have priced out a rate cut at next week’s Federal Reserve meeting, with September cut odds at 58%, according to CME’s FedWatch.
Market breadth was strong: advancing issues outnumbered decliners in the S&P 500 by more than 2-to-1. The index posted 50 new highs, while the Nasdaq logged 96 new highs.
With the S&P 500 up 8% and the Nasdaq up nearly 9% year-to-date, investor confidence remains robust, driven by tech growth, trade optimism, and resilient earnings.
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Author: Sean Probber
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