The stock market extended its rally this week, with the S&P 500 and Nasdaq Composite hitting record intraday and closing highs on Friday. The S&P 500 reached a high of 6,395.82 and closed at 6,388.64, while the Nasdaq hit 21,159.80 intraday and settled at 21,108.32.
Optimism over trade deals supported the bullish sentiment. A trade agreement with Japan and potential deals with the EU and China eased investor concerns ahead of the August 1 tariff deadline. The trade deal with Japan featured a 15% tariff on Japanese imports, an investment of $550 billion into the U.S., and an opening of Japan’s markets to rice and auto imports from the U.S.
Additionally, it was reported that the U.S. and the EU were close to finalizing a trade agreement, also with a 15% tariff.
The market also benefitted from Alphabet (GOOGL) trading higher after the company beat EPS expectations by $0.13 and reassured the market about the industry’s commitment to AI development by raising its capital spending guidance by $10 billion to $85 billion.
Alphabet’s hefty commitment to AI, combined with headlines that President Trump signed executive orders to support the export of American AI technology and the buildout of data center infrastructure, led to the technology sector making gains on the week.
All 11 sectors finished higher for the week, led by health care (+3.4%), materials (+2.4%), industrials (+2.3%), communication services (+2.2%), and real estate (+2.2%). Financials (+1.7%), energy (+1.4%), consumer discretionary (+1.2%), utilities (+0.9%), and technology (+0.7%), also posted solid gains. Consumer staples (+0.01%) was the only sector that was flat for the week.