Fresh gains for US indices on hopes of deal breakthrough

Chris Beauchamp IG

Trade deal headlines lifted US stocks this afternoon, but the rumblings of bad news in company earnings continue to grow louder, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

US stocks continue to rebound
“Hopes of progress on trade deals were bolstered by reports that an agreement with India was near, leading to a strong opening hour of trading for US markets. Wall Street continues its rebound from the Powell-panic earlier in the week, and the continued decline in the Vix points towards a relaxation of nerves for the time being. Still, until the deals are agreed, these gains remain fragile. Hopes are high that Alphabet can report some reassuring numbers too this evening, repeating Tesla’s trick from earlier in the week.”

Tariff impact only just beginning
“Stocks might be recovering but there’s still lots more bad news to come. This season’s earnings are providing an inkling, with Pepsi, Merck and American Airlines all sounding a warning about the US economy. Still, hope springs eternal, and the really bad news will only start to show up later in the year, meaning this season is likely to be the calm before the storm.”

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Chris Beauchamp

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