By Stephen Culp
NEW YORK (Reuters) -The S&P 500 and the Nasdaq gained ground on Thursday, and gold prices eased as investors digested a mixed batch of corporate earnings along with signs of progress in tariff negotiations between the U.S. and trading partners.
The S&P 500 and the Nasdaq reached all-time closing highs, while the blue-chip Dow closed in negative territory. Benchmark Treasury yields built on Wednesday’s gains and crude prices gained ground over economic optimism and tightening supply.
Second-quarter reporting season has hit full stride, with nearly one-third of the companies in the S&P 500 having posted results. Of those, 80% have reported better-than-expected earnings, according to LSEG data.
“Companies are beating expectations and there was some risk that they would not,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. “They are starting to provide some guidance and moving past the uncertainty of tariffs. Investors are taking it constructively.”
The European Union said that a negotiated trade agreement with the United States was within reach, with a view toward reaching a deal before President Trump’s 30% tariffs scheduled to take effect on August 1. This follows a similar agreement with Japan.
“The deals in Asia and hopes for a deal with Europe are taking risk off the table in world markets and here, domestically,” Haworth added. “What we’re seeing is better performance out of Japan and Europe, as the news is ‘less worse’ than expected and the terms are not as onerous as people feared.”
U.S. President Donald Trump, a relentless critic of Federal Reserve Chair Jerome Powell, is due to pay a visit to the central bank on Thursday.
This comes amid tensions between the administration and the Fed, which is expected to convene for its two-day monetary policy meeting next week, likely culminating in a decision to let key interest rates stand.
The Dow Jones Industrial Average fell 316.20 points, or 0.70%, to 44,694.09, the S&P 500 rose 4.48 points, or 0.07%, to 6,363.39 and the Nasdaq Composite rose 37.94 points, or 0.18%, to 21,057.96.
European shares advanced and world stocks touched record highs amid reports that the European Union and Washington were close to clinching a tariff agreement, close on the heels of a similar deal with Japan.
MSCI’s gauge of stocks across the globe rose 1.67 points, or 0.18%, to 941.01.
The pan-European STOXX 600 index rose 0.24%, while Europe’s broad FTSEurofirst 300 index rose 3.92 points, or 0.18%.
Emerging market stocks rose 1.19 points, or 0.09%, to 1,266.35. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 0.13%, to 666.69, while Japan’s Nikkei rose 655.02 points, or 1.59%, to 41,826.34.
U.S. Treasury yields climbed as brightening prospects for trade agreements reduced investor anxieties.
The yield on benchmark U.S. 10-year notes rose 2 basis points to 4.408%, from 4.388% late on Wednesday.
The 30-year bond yield rose 0.3 basis points to 4.9522% from 4.949% late on Wednesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 3.4 basis points to 3.918%, from 3.884% late on Wednesday.
The dollar traded sideways against the euro after the ECB let interest rates stand, but was mixed against the yen following the U.S.-Japan trade agreement and the result of Sunday’s upper house election.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.24% to 97.43, with the euro down 0.11% at $1.1757.
Against the Japanese yen, the dollar strengthened 0.29% to 146.92.
In cryptocurrencies, bitcoin gained 0.90% to $119,063.64. Ethereum rose 4.66% to $3,737.09.
Oil prices rebounded, buoyed by expected cuts in Russian gasoline supply, optimism over trade talks, and a sharper-than-expected drop in U.S. inventories.
U.S. crude rose 1.20% to settle at $66.03 a barrel, while Brent settled at $69.18 per barrel, up 0.98% on the day.
Gold prices extended their losses as trade deal optimism continued to dampen demand for the safe-haven metal.
Spot gold fell 0.51% to $3,370.26 an ounce. U.S. gold futures fell 0.8% to $3,367.00 an ounce.
(Reporting by Stephen Culp; Additional reporting by Marc Jones in London, editing by Ed Osmond, Marguerita Choy and Nick Zieminski)
