Stock markets mostly bumped upwards Thursday as hopes grew that the European Union could strike a trade deal with the United States, while Tesla shares nosedived on poor earnings results.
Investors have profited in recent weeks from wagers that governments will eventually hammer out pacts with Donald Trump ahead of the US president’s looming August 1 deadline to avoid steeper levies.
“Buyers are in control and there remains a lot of optimism about future trade deals,” said Adam Sarhan of 50 Park Investments.
“For now the market is choosing to look at the bullish side of the coin,” he said. “Not the bearish side and not the neutral side.”
On Wall Street, both the S&P 500 and tech-heavy Nasdaq edged higher to close at fresh records, while the Dow retreated.
Google parent Alphabet climbed 0.9 percent after reporting a whopping $28.2 billion in second-quarter profits as it touted its artificial intelligence offerings.
But Tesla fell 8.2 percent as CEO Elon Musk warned investors of a rough patch for earnings after the electric car maker reported a 16 percent drop in quarterly profits.
A survey of US manufacturers released Thursday showed business confidence in the world’s top economy also deteriorated in July for the second month running.
“Companies cite ongoing concerns over the impact of government policies, notably in terms of both tariffs and cuts to federal spending,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.
In Europe, London’s FTSE 100 gained 0.9 percent at the close, lifted by a stream of robust earnings, including from consumer goods group Reckitt, mobile phone giant Vodafone and Lloyds bank.
Paris fell, dragged down by a drop in luxury stocks and disappointing profits from fossil fuel giant TotalEnergies.
Yet most other European stocks markets including Frankfurt rose, as the European Union and Washington appeared close to a deal that would halve a threatened 30-percent levy on EU goods to 15 percent.
A European Commission spokesman said Thursday that he believed a trade deal with the US is “within reach.”
According to multiple diplomats, the deal could waive tariffs on aircraft, lumber, pharmaceutical products and agricultural goods.
The bloc, however, is still forging ahead with contingency plans in case talks fail, with member states approving a 93-billion-euro ($109-billion) package of counter-tariffs on US goods.
Meanwhile, the European Central Bank left interest rates unchanged, as widely expected.
