The S&P 500 and Nasdaq closed at record highs, driven by gains in Alphabet, Tesla, Apple, and Amazon, as investors anticipate strong earnings and potential trade deals to offset tariff concerns. Analysts expect a 6.7% rise in Q2 earnings, with Big Tech leading the charge.
00:00The S&P 500 and the Nasdaq notched record-high closers on Monday, lifted by Alphabet and other mega caps ahead of several earnings reports this week,
00:09while investors bet on potential trade deals to blunt economy damage from the Trump administration's global tariffs.
00:15Google parent Alphabet rallied ahead of its quarterly report on Wednesday.
00:19Tesla also reporting on Wednesday kick-off earnings from the so-called Magnificent 7,
00:24and their results may set the tone for other heavyweight companies reporting in the next several days.
00:30Apple and Amazon each gained help lift the S&P 500,
00:34very generally after the telecommunications company boosted its annual profit forecast.
00:39Analysts on average expected S&P 500 companies to report a 6.7% increase in earnings for the second quarter,
00:47with big tech driving much of that gain.
00:49The stock market today seems to be running on hopes that we get some moderation in tariffs,
00:58and also that we've had decent earnings.
01:01Earnings are coming in okay.
01:03We're still very early in second quarter earnings season.
01:06Just about 12% of the S&P 500 is reported.
01:10But the bank earnings look to be pretty solid with good capital markets gains.
01:15And then we've had sporadically good news from some of the airlines as well as the telecommunication companies
01:22that activity is holding in there okay, and the market seems to be cheering that.
01:27On the market side, we are still glass half full, and that really comes from, one, a solid labor market.
01:34Two, corporate earnings are looking really fairly solid for the year.
01:37And three, inflation, even though it's elevated and may creep a little higher, is not threatening the consumer at this point.
01:45So we think this is an economy that can survive, and the markets appear to be doing that as well.
01:51So we may be heading into a bit of a stronger patch as we look down the road.
01:57Certainly there are risks, and we're concerned about them.
02:00But that consumer resilience, low unemployment rate, high wage growth are all helping this economy survive.
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