US-Japan tariff agreement reached… US S&P 500 attempts new all-time high again

Watch for Alphabet and Tesla earnings announcements after market close

US Big Three automaker stocks all rise following 15% tariff agreement on Japanese cars

With optimism spreading over the conclusion of the US-Japan trade agreement, US stock markets reached record highs once again on the 23rd (local time).

As of 10:10 a.m. Eastern Standard Time, the S&P 500 was up 0.2% and the Dow Jones Industrial Average climbed 0.4%. The NASDAQ Composite was fluctuating at a level similar to the previous day.

Due to decreased demand for safe-haven assets, US Treasury bonds ended their rally and reversed to a decline on this day. The yield on the 10-year Treasury rose by 3 basis points (1 bp = 0.01%) to 4.374%, while the 2-year yield increased by 2 bp compared to the previous day, reaching 3.855%.

President Donald Trump announced the previous night on his social media, "The United States and Japan have completed a major deal." This agreement includes a 15% tariff imposed on Japanese exports to the US including automobiles, and the establishment of an investment fund of $550 billion (about ₩758 trillion) by Japan in the US. Treasury Secretary Scott Besant emphasized that the successful agreement with Japan was made possible by an innovative financing approach.

President Trump also stated that he is meeting with European Union officials to pursue a trade agreement with the EU. The EU, having failed in trade talks with the US, has taken a firm stance that if a 30% tariff rate on EU exports takes effect after August 1, it will impose a retaliatory tariff of 30% on US goods worth about €100 billion (about ₩162 trillion).

Alphabet and Tesla are scheduled to announce their earnings later in the afternoon.

Shares of Alphabet, expected to report strong earnings, fell 0.6% at the open. Tesla's stock, which analysts anticipate will report its largest sales decline in a decade for the second quarter, rose 0.2% in early trading.

Chipotle Mexican Grill and toy maker Mattel, Inc. will also release their earnings today.

With meme stocks making a comeback, shares of GoPro, Inc., Krispy Kreme, and Beyond Meat surged.

US automakers, who had complained that the 15% tariff on Japanese automobiles was unfair compared to the 25% tariff on Canadian and Mexican cars and parts, also saw their stock prices rise. GM gained over 4% and Ford Motor Company’s stock climbed more than 2%. Stellantis N.V., which imports over 40% of its US-sold vehicles, saw its shares jump more than 7%.

According to FactSet, of the 105 S&P 500 companies that have reported earnings so far this season, more than 86% have beaten Wall Street expectations.

Bitcoin, after attempting to surpass $120,000 the previous day, traded down 1.4% at $118,060.05. Ether (Ethereum) decreased 1.2% to $3,663.31.

Contributed by Jung-A Kim, kja@hankyung.com