Overnight U.S. Stocks | Trade expectations boost S&P 500 and Nasdaq to new highs, gold and U.S. Treasuries both decline, Tesla's Q2 performance is disappointing

According to Zhitong Finance APP, U.S. stocks closed higher on Wednesday. The Dow Jones Industrial Average rose over 500 points, with the S&P 500 and Nasdaq hitting new highs. U.S. President Trump announced a trade agreement with Japan, boosting market expectations for more trade agreements before the August 1 tariff deadline.

Reports suggest that the U.S. and Europe are close to reaching a 15% tariff agreement. As risk aversion subsided, U.S. Treasury yields rose across the board, and gold fell below the $3,400 mark.

[U.S. Stocks] At the close, the Dow rose 507.85 points, an increase of 1.14%, to 45,010.29 points; the Nasdaq rose 127.33 points, an increase of 0.61%, to 21,020.02 points; the S&P 500 index rose 49.29 points, an increase of 0.78%, to 6,358.91 points. Google's revenue exceeded expectations and raised its full-year capital expenditure, with after-hours stock prices initially rising 3.5%, then retreating to a 1.80% increase. Tesla's second-quarter performance was dismal, and Musk warned that Tesla might face "several challenging quarters," with after-hours stock prices dropping over 5%.

[European Stocks] The German DAX 30 index rose 0.83%; the UK FTSE 100 index rose 0.42%; the French CAC 40 index rose 1.37%; the European Stoxx 50 index rose 1.02%; the Spanish IBEX 35 index rose 0.19%.

[Asia-Pacific Stock Markets] The Nikkei 225 index rose 3.51%, the South Korean KOSPI index rose 0.44%, and the Indonesian Composite Index rose 1.69%.

[Foreign Exchange] The ICE U.S. Dollar Index fell 0.19%, to 97.207 points; the euro rose 0.16 against the dollar, the pound rose 0.37 against the dollar, and the dollar was roughly flat against the Swiss franc; the dollar fell 0.08 against the yen, to 146.52 yen.

[Crude Oil] WTI September crude oil futures fell $0.06, a decrease of 0.09%, to $65.25 per barrel; Brent September crude oil futures fell $0.08, a decrease of over 0.13%, to $68.51 per barrel.

[Metals] Spot gold fell 1.22%, to $3,389.50 per ounce; COMEX gold futures fell 1.28%, to $3,399.50 per ounce.

[Cryptocurrency] CME Bitcoin futures BTC main contract fell 1.12% compared to Tuesday's New York close, to $118,000.

[Macroeconomic News]

Trump: Will impose simple tariffs of 15% to 50% on most countries. On the 23rd local time, U.S. President Trump stated that he would impose simple tariffs of 15% to 50% on most other countries in the world. Trump also mentioned that the U.S. is engaged in serious negotiations with the European Union, and if they agree to open up to U.S. businesses, the U.S. will allow them to pay lower tariffs.

U.S. Treasury Secretary Mnuchin: Not in a hurry to select a successor to Fed Chair Powell. Mnuchin stated on Wednesday that there is currently "no rush" to determine a successor to Fed Chair Powell, and candidates may come from current Federal Reserve Board members or regional Fed presidents. However, he did not disclose specific names. Mnuchin himself, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, and current Fed Governor Christopher Waller are all on the list of candidates being considered by President Trump for the Fed chair position In response, Besant stated, "The list is very long, very long." "I will not discuss the specific selection process, but we have indeed initiated the relevant process." "Clearly, this will be President Trump's decision, and we are not in a hurry to make a decision."

It is reported that Europe and the United States are moving towards reaching a trade agreement, with most product tariffs set at 15%. Diplomats familiar with the negotiations revealed that the European Union and the United States are moving towards an agreement that will set a 15% tariff rate on most products. Diplomats indicated that member states may be prepared to accept a 15% tariff, and EU officials are pushing for this rate to cover industries such as automobiles. One diplomat added that imports of steel and aluminum exceeding a certain quota will face a 50% tariff. Diplomats stated that while the EU is optimistic about reaching an agreement, they also cautiously believe that any final agreement will need to be approved by U.S. President Donald Trump, whose final decision is difficult to predict. A U.S. official stated that negotiations are still evolving and an agreement may not be announced soon.

U.S. existing home sales fell to the lowest level in nearly 15 years in June, with home prices hitting a new historical high. The U.S. real estate market continues to show a profound "disconnection": despite home sales activity plummeting due to high borrowing costs and economic uncertainty, home prices have reached a new historical high. On July 23, the National Association of Realtors (NAR) reported that the total number of existing home sales in the U.S. fell 2.7% year-on-year in June to an annualized rate of 3.9 million, the lowest level since September of last year, and below the market expectation of 4 million. This is the latest signal of persistently weak market demand. Trump publicly stated that the U.S. housing market is lagging due to Federal Reserve Chairman "Mr. Too Late" Powell's refusal to cut interest rates.

The White House releases "AI Action Plan": relax regulations, expand energy, and accelerate AI development. The Trump administration released the "AI Action Plan," aimed at accelerating the development of artificial intelligence in the U.S. by relaxing regulations and expanding energy supply for data centers, striving to make U.S. technology the foundation of global AI; it suggests suspending funding support for states that impose excessive regulations on emerging technologies; plans to promote AI initiatives through executive orders, including directives to support the global deployment of U.S. technology and a call for all large language models procured by the government to remain neutral and unbiased. Analysts say that OpenAI, Microsoft, and Amazon are the big winners.

【Individual Stock News】

Cloud business surged 32%! Google (GOOGL.US) invests $85 billion to enhance AI infrastructure, forecasting further increases in spending by 2026. For the second quarter ending June 30, Google (GOOGL.US) reported total revenue of $96.43 billion, exceeding analysts' average expectation of about $94 billion; earnings per share were $2.31, also higher than the expected $2.18. Among them, Google's cloud business sales surged nearly 32% year-on-year, far exceeding the growth expectation of 26.5%, becoming the main engine driving revenue growth. Google announced an increase in its annual capital expenditure plan to about $85 billion and forecasted continued increases in investment next year, stating that this decision stems from strong demand for its cloud computing services With new artificial intelligence (AI) features and a stable digital advertising market, the company's quarterly revenue and profit both far exceeded Wall Street expectations.

Tesla (TSLA.US) Q2 performance declines, Musk warns of "poor performance in the coming quarters," raising concerns. The financial report shows that its core financial indicators have declined for the second consecutive quarter. Total revenue for the quarter fell 16% year-on-year to $22.5 billion, below analysts' expectations of $22.74 billion; adjusted earnings per share were $0.40, also missing the market expectation of $0.43. The automotive business, as the core segment, saw revenue shrink from $19.9 billion in the same period last year to $16.7 billion, with regulatory credit sales revenue dropping from $890 million to $439 million, becoming a significant drag on performance. Tesla reiterated plans to launch new vehicles as scheduled this year, with the Robotaxi product Cybercab set for mass production next year, stating plans for a more affordable vehicle to undergo trial production in the first half of this year and mass production in the second half, and the Semi truck to be mass-produced next year; the second quarter marks a milestone in its transformation into a leader in AI and robotics services, preparing to launch FSD on a larger scale in China, pending regulatory approval; the impact of tariffs, fiscal policies, and political sentiment remains unclear, but investment in R&D and capital expenditures continues. The conference call estimated tariff costs at about $300 million, and Musk warned that the situation could be severe in the coming quarters.

IBM (IBM.US) software business performance falls short of expectations, investor enthusiasm dampened. IBM's financial report shows that its closely watched software division's sales were weaker than expected, disappointing investors who had become increasingly optimistic about this business. In the second quarter, software division sales grew 10% to $7.39 billion, slightly below the analysts' average expectation of $7.49 billion. The company's underperforming consulting business saw revenue grow by 3% to $5.31 billion