Trading day: Ending on another high

By Jamie McGeever

ORLANDO, Florida (Reuters) — TRADING DAY

Making sense of the forces driving global markets

By Jamie McGeever, Markets Columnist

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For the S&P 500 and Nasdaq, the week ended on Friday as it began on Monday: new highs on growing confidence that the U.S. will strike favorable trade deals with major trading partners and that tariffs won’t choke growth, and optimism around the earnings-boosting power of artificial intelligence.

This offset some less encouraging signals from U.S. and European earnings about the impact of tariffs and trade uncertainty. But the bulls are in control, it seems, and markets go into next week’s heavy event risk at or near their all-time highs.

This Week’s Key Market Moves

* The S&P 500 gains 1.5%, rising every day of the week, andthe Nasdaq rises 1%. * Intel shares slump 10.4% on Q2 loss. * Japan’s Nikkei 225 jumps 4%, getting to within 1% of lastJuly’s record high 42,426 points. * Japan’s 10-year JGB yield rises 7.5 bps, its biggestweekly rise since May, to a 17-year high above 1.60%. * China’s yuan rises to its strongest level of the year,reaching 7.1478 per dollar on Thursday.

Ending on another high

The week just ended saw a wave of record stock market highs on Wall Street and around the world as investors cheered the US-Japan trade deal and a raft of corporate earnings results. Next week will be packed with even more market-sensitive events.

Policy decisions from the Fed and other major central banks, Fed Chair Jerome Powell’s press conference, U.S. PCE inflation, earnings from four of the ‘Magnificent Seven’ tech giants, and Washington’s August 1 tariff deadline for most countries await.

Meanwhile, U.S. and Chinese officials will meet in Stockholm to discuss extending the August 12 deadline for reaching a trade deal. This will be U.S. Treasury Secretary Scott Bessent’s third round of talks with his Chinese counterparts

That’s a lot to be heaped onto investors’ plate, and one wonders how they will digest it all. It wouldn’t be a surprise if market volatility picked up from surprisingly low levels – the VIX index is the lowest in five months, and the Treasury market’s MOVE index is near its recent three and a half-year low.

Meanwhile, demand for U.S. government debt will be tested as the Treasury auctions $173 billion of notes in the 2-7 year part of the curve. Recent auctions of longer-dated bonds have drawn strong demand and foreign private sector investors bought huge quantities of Treasuries in May, which bodes well.