Wall Street stocks held near record highs while the US dollar posted its biggest gain since May, driven by optimism over a new US-EU tariff agreement and signs of progress in China trade talks.
The S&P 500 briefly topped 6,400 before closing flat. The dollar rose nearly 1%, while the euro posted its sharpest decline in over two months. Treasury yields edged up slightly, and oil gained after President Trump hinted at a faster Ukraine ceasefire timeline.
Investors are bracing for a pivotal week, with the Federal Reserve expected to hold rates steady on Wednesday amid political pressure and mixed economic signals. Big-tech earnings from Microsoft, Meta, Apple, and Amazon—companies worth a combined $11.3 trillion—could shape market direction.
Jane Street’s Chris Larkin noted, “This week could make or break near-term momentum.”
Trump said from Scotland, “We’re very close to a deal with China,” boosting sentiment. Analysts see recent deals easing business uncertainty.
The Treasury raised its Q3 borrowing estimate to $1 trillion due to debt ceiling distortions. Meanwhile, strong corporate earnings continue to support equities—82% of S&P 500 firms reporting so far have beaten forecasts.
Oppenheimer raised its S&P 500 year-end target to 7,100, forecasting a third consecutive year of 20% gains. Other analysts see earnings strength as a reason valuations can continue rising.