Dow Jones: Trade Deal Boosts Caterpillar, Boeing—Market Eyes EU Talks Next

Dow Rallies Over 200 Points on Trump’s Japan Trade Deal Announcement

 

The Dow Jones Industrial Average climbed over 200 points on Wednesday as traders welcomed news of a U.S.–Japan trade agreement. President Trump’s announcement of a “massive Deal” with Japan, featuring reciprocal 15% tariffs on exports, boosted confidence that further international deals—particularly with the EU—may follow.

The S&P 500 and Nasdaq rose modestly, with the former logging another record close while the latter lagged under pressure from chip stocks.

How Did Dow Stocks in Key Sectors React to Trade Optimism?

Industrials and materials, typically sensitive to trade developments, saw solid gains. Caterpillar surged 2.13% to $426.10, while Boeing added 1.23% to $231.30. Honeywell and 3M also advanced, up 1.03% and down just 0.37%, respectively, as investors anticipated stronger global demand under improved trade terms.

Financials saw moderate support, with American Express up 0.69% and JPMorgan gaining 0.49%. Goldman Sachs edged up 0.37% to $703.03, helped by improved global sentiment. In the energy sector, Chevron rose 0.87%, and broader sector ETFs ticked up 0.74%.

Is the Housing Market Dragging on Consumer Stocks?

Housing data disappointed with existing home sales dropping 2.7% in June—far worse than the expected 0.7% decline. Sales fell to a 3.93 million pace, missing the 4 million forecast. Despite this, home prices hit a record for June at $435,300, driven by tight supply and weak construction.

Consumer discretionary stocks were mixed. Home Depot rose 0.76% to $373.83, suggesting resilience in home improvement spending, while McDonald’s fell 0.36% and Coca-Cola slid 1.13%, reflecting concerns over consumer strength amid housing market stress.

What’s the Outlook for Big Tech as Earnings Begin?

Technology stocks took a breather ahead of major earnings reports. Microsoft dropped 0.74% and Apple fell 0.73%, while Alphabet and Tesla were slated to report after the bell. The tech sector ETF slipped slightly by 0.02%, as traders prepared for guidance updates from these market-moving giants.

Smaller-cap names with volatile earnings also drew interest. GoPro and Krispy Kreme jumped during the session, suggesting retail enthusiasm, while Kohl’s extended gains from Tuesday.

What Should Traders Watch Next?

Market momentum remains tied to trade developments and earnings. The Japan deal lifted global trade sentiment, and potential EU progress could extend the rally. However, housing weakness and stretched valuations in consumer staples and tech remain headwinds.

With over 86% of S&P 500 companies beating earnings estimates so far, results from Alphabet, Tesla, Chipotle, and Mattel will be key in guiding near-term direction.

Traders should stay focused on Fed signals and upcoming GDP and inflation data for confirmation of the current market trend.

More Information in our Economic Calendar.