By Stephen Culp
NEW YORK (Reuters) -Wall Street stocks advanced on Monday and Treasury yields softened at the top of a busy week of corporate earnings reports, as negotiations between the United States and its trading partners ramped up in the face of a fast-approaching August 1 deadline.
All three major U.S. stock indexes moved higher in opposition to their European counterparts, and the dollar weakened against the yen in the wake of Japan’s weekend elections.
Microchips and tech-adjacent momentum stocks were providing much of the upside muscle.
Second-quarter earnings season shifts into high gear this week, and the roster includes Alphabet and Tesla, two of the “Magnificent Seven” AI-adjacent megacap stocks. IBM and Intel are two high-profile tech names expected to report during a busy week that also includes a host of industrials, from General Motors to Union Pacific.
“You’re seeing an apparent return of U.S. dominance for equity investors, and it is being driven by a very resilient U.S. consumer,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York, who added, “There’s an increasing realization that the back-and-forth on tariffs is not anywhere near over, and that’s pressuring European shares, and Asian shares to a certain extent.”
Trade negotiations have yet to yield any meaningful deals as the clock ticks down on President Donald Trump’s August 1 tariff deadline.
“I’m not convinced that Donald Trump is interested in reaching a deal with Europe or other major trading partners before August 1st,” Pursche said. “He is interested in creating a narrative other than anything related to Epstein, or some of the blunders in ICE arrests and deportations and detentions.”
U.S. Treasury Secretary Scott Bessent told CNBC, “I think that what we need to do is examine the entire Federal Reserve institution and whether they have been successful,” further stoking concerns over the central bank’s autonomy following reports Trump is considering firing Chairman Jerome Powell.
“This is highly politically motivated and that both Secretary Bessent, as well as President Trump, have a recognition and understanding of the enormous chaos that a non-independent Fed, or attempts to fire Chairman Powell would have on markets, and I don’t believe that is their objective or desire,” Pursche said.
The Dow Jones Industrial Average rose 162.64 points, or 0.36%, to 44,504.83, the S&P 500 rose 33.35 points, or 0.53%, to 6,330.23 and the Nasdaq Composite rose 152.18 points, or 0.73%, to 21,048.85.
European stocks softened amid fading hopes for an acceptable trade agreement with the United States ahead of the August 1 deadline and the European Union mulled a broad array of retaliatory measures.
MSCI’s gauge of stocks across the globe rose 4.01 points, or 0.43%, to 932.00.
The pan-European STOXX 600 index fell 0.16%, while Europe’s broad FTSEurofirst 300 index fell 4.24 points, or 0.20%
Emerging market stocks rose 5.18 points, or 0.41%, to 1,254.56. MSCI’s broadest index of Asia-Pacific shares outside Japan closed up 0.19% to 659.17, while Japan’s Nikkei fell 82.08 points, or 0.21%, to 39,819.11.
The dollar lost ground as the yen strengthened in the aftermath of Japan’s weekend election, which saw its ruling coalition lose its majority in the upper house
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.52% to 97.89, with the euro up 0.58% at $1.1692.
Against the Japanese yen, the dollar weakened 0.93% to 147.42.
Bitcoin headed higher after Trump signed the GENIUS Act into law late Friday, marking a huge win for the crypto industry.
Bitcoin gained 0.72% to $118,988.75. Ethereum rose 2.94% to $3,851.61.
U.S. Treasury yields softened across the board.
The yield on benchmark U.S. 10-year notes fell 7.1 basis points to 4.36% from 4.431% late on Friday.
The 30-year bond yield fell 7.7 basis points to 4.9224% from 4.999% late on Friday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.7 basis points to 3.848% from 3.875% late on Friday.
Oil prices dipped as investors shrugged off the latest European sanctions on Russian oil, which are expected to have minimal impact. Concerns over dampening demand persisted amid lingering tariff concerns.
U.S. crude fell 0.7% to $66.87 a barrel and Brent fell to $68.74 per barrel, down 0.78% on the day.
Gold prices advanced in opposition to the softening greenback.
Spot gold rose 1.47% to $3,398.52 an ounce. U.S. gold futures rose 1.74% to $3,411.30 an ounce.
(Reporting by Stephen Culp; Additional reporting by Wayne Cole in Sydney and Lucy Raitano in London; Editing by Mark Porter)
