Wall Street starts session with Dow's 270 points surge on trade optimism as earnings season heats up

US stocks opened higher on Wednesday as optimism around global trade returned following President Donald Trump’s announcement of a bilateral trade agreement with Japan. The move helped lift market sentiment, pushing the Dow Jones Industrial Average up over 270 points in early trade.

As of 9:30 a.m. ET, the Dow gained 0.6 percent, while the S&P 500 rose 0.3 percent. The Nasdaq Composite inched up 0.1 percent, recovering partially from Tuesday’s chip-led slump.

The gains came after Trump said on Truth Social that the US had reached a “massive” trade deal with Japan, which includes reciprocal tariffs of 15 percent on Japanese exports. He also hinted at ongoing talks with European Union officials, signaling a broader push for trade realignment ahead of the August 1 deadline his campaign has set for a new trade framework.

The S&P 500 is coming off two consecutive record-high closes, although momentum was capped Tuesday by weakness in semiconductor stocks. The benchmark index has logged 11 record finishes so far in 2025, underscoring the strength of the broader rally despite intermittent sectoral rotation.

Markets are now bracing for a busy earnings evening, with Alphabet and Tesla slated to report after the bell. Their numbers will offer the first concrete read from the mega-cap tech cohort this season — a group that has been central to the market’s gains over the past year.

Investors are also tracking results from Chipotle Mexican Grill and Mattel, while parsing through macro signals such as the US existing home sales data due later in the day.

So far, the earnings season has exceeded expectations — with over 86 percent of the S&P 500 companies that have reported beating analyst estimates, according to FactSet.

Global markets were quick to respond.

“European stock markets are taking their clues from Japan this morning, rising sharply on the hope that the Japan deal means the EU is about to achieve the same,” said Neil Wilson, strategist at Saxo Markets. The FTSE 100 hit a fresh intraday high, rising 0.5 percent, with Germany’s DAX and France’s CAC also gaining.

Meanwhile, the pan-European STOXX 600 index jumped nearly 0.9 percent, and gold prices fell as safe-haven demand ebbed. COMEX gold futures dropped 0.3 percent to $3,434.50 per ounce.

In currency markets, the pound gained 0.2 percent against the dollar to 1.3548 amid a broader decline in greenback strength.