Market snapshot: blue-chip bonanza continues

With more trade deals either agreed or likely, there now appears less risk of further tariff tantrums. ii's head of markets has the latest investor reaction.

28th July 2025 08:31

Richard Hunter from interactive investor

Further tariff deals and a successful earnings season so far continue to keep the fires burning, with both the S&P500 and Nasdaq again hitting record closing highs.

The trade deals agreed with Japan and Indonesia ahead of Friday’s deadline was followed over the weekend with more substantial progress, as the US and EU penned an agreement which will see tariffs of 15%, as compared to the 30% which had been feared. The agreement includes, inter alia, a commitment for the EU to invest some $600 billion in the US, and the progress is expected to continue as talks between the US and China take place today in Stockholm. These talks are expected, at the very least, to yield another extension to the two-way tariff deadline as negotiations continue.

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Meanwhile, US corporates appear to be in rude health, with more than 80% of the companies which have reported so far having beaten expectations, with strong performances including, but not limited to, the likes of the banks and Alphabet Inc Class A (NASDAQ:GOOGL).

The favourable backdrop will face a stern test this week as the barrage of earnings continues, with updates across a range of sectors, including Boeing Co (NYSE:BA), Ford Motor Co (NYSE:F), Chevron Corp (NYSE:CVX) and Exxon Mobil Corp (NYSE:XOM). In addition, there are also high expectations as four of the “Magnificent Seven” report in the form of Meta Platforms Inc Class A (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), Apple Inc (NASDAQ:AAPL) and Amazon.com Inc (NASDAQ:AMZN).

Investors will also keep a keen eye on economic developments to add to the packed diary, with the latest interest rate decision from the Federal Reserve later in the week expected to reveal no change, with the next cut likely to arrive in September. The non-farm payrolls report finishes off a breathless week, with the consensus being that 102,000 jobs will have been added in July, as compared to the previous month’s reading of 147,000, with unemployment ticking marginally higher from 4.1% to 4.2%.

In the meantime, the bulls remain on the march. The Dow Jones is now up by 5.5% in the year to date, just 0.25% away from the record it set in December, while the S&P500 and Nasdaq continue to break ceilings with gains of 8.6% and 9.3% respectively so far this year.

A slight glitch to the rampant proceedings came with a mixed performance across Asian markets, with the Nikkei 225 slipping as investors continued to gauge the implications of the recent US trade deal. With terms still being ironed out and with the apparent promise of $550 billion of investment in the US by Japan, it remains unclear as what the exact details could entail, sending shares marginally lower as a result.

The blue-chip bonanza will also extend to the UK, with a host of companies reporting.

The likes of AstraZeneca (LSE:AZN) and GSK (LSE:GSK), BAE Systems (LSE:BA.) and Rolls-Royce Holdings (LSE:RR.), Shell (LSE:SHEL), Unilever (LSE:ULVR) and Next (LSE:NXT) will all provide updates, while the banking season draws to a close with half-year numbers from HSBC Holdings (LSE:HSBA), Standard Chartered (LSE:STAN) and Barclays (LSE:BARC).

For the latter, the recent strong read across from JPMorgan Chase & Co (NYSE:JPM) is likely to feature highly on the investor radar, with hopes for an upturn in trading and deal fees. In addition, the bank’s credit card business on both sides of the pond will be of interest, with investors searching for either an improvement in higher spending resulting in higher fees, or conversely whether some weakening has resulted in higher defaults and therefore bank impairments.

In anticipation of this seminal week, UK indices pulsed higher with the FTSE100 smashing through another record high, bringing its performance in the year to date to a 12% let alone the additional 3.3% coming from the average dividend yield of its constituents.

Gains were widespread in early trade, with the more domestically focused FTSE250 also flexing its muscles as an increasingly attractive investment destination with another strong open which heaves the index higher by 7.8% so far this year.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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