Wall Street Climbs on US-Japan Trade Agreement

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Wall Street Climbs on US-Japan Trade Agreement/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets edged toward new records after President Trump’s trade deal with Japan reduced proposed tariffs to 15%. The S&P 500, Dow, and Nasdaq saw gains, while global markets reacted positively. Despite concerns, inflationary effects of tariffs remain lower than feared.

Wall Street Near Record Highs on Strong Corporate Earnings

US-Japan Trade Deal Boosts Markets – Quick Looks

U.S. stocks hit fresh highs after U.S.-Japan trade agreement
Tariffs on Japanese imports lowered from 25% to 15%
Dow rose 232 points, S&P 500 up 0.4%, Nasdaq up 0.3%
Tokyo’s Nikkei 225 soared 3.5% on the news
Trump also announced deals with the Philippines and Indonesia
Economists note reduced consumer price impact from tariffs
Companies like Hasbro and Texas Instruments flagged future cost concerns
GE Vernova jumped 10.5% after raising revenue forecasts
Meme stock trading surged: GoPro up 51.1%, Krispy Kreme up 25.4%
Bond yields rose slightly; 10-year Treasury at 4.37%

Deep Look: US Stocks Rise as Japan Tariff Deal Lifts Market Sentiment

NEW YORK — U.S. markets edged toward another record high Wednesday as President Donald Trump’s trade deal with Japan eased tariff concerns and fueled investor optimism. The agreement, which lowers proposed tariffs on Japanese imports from 25% to 15%, triggered a global market rally and boosted confidence in the outlook for trade and inflation.

The S&P 500 climbed 0.4%, building on its previous record close. The Dow Jones Industrial Average added 232 points, or 0.5%, and the Nasdaq rose 0.3%, reflecting positive momentum across sectors.

Markets React Globally

Investor enthusiasm wasn’t limited to Wall Street. In Tokyo, the Nikkei 225 surged 3.5%, its strongest single-day gain in months, while European indices such as France’s CAC 40 jumped 1.2%. Hong Kong’s Hang Seng Index also gained 1.6%, reflecting optimism that the worst of the trade tension might be easing.

From 25% to 15%: A “Relief Rally”

While a 15% tariff would typically be considered burdensome, the fact that it replaced a threatened 25% levy made markets breathe easier.

“It’s a sign of the times that markets would cheer 15% tariffs,” said Brian Jacobsen, chief economist at Annex Wealth Management. “A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.”

President Trump’s previous threats of higher tariffs had unnerved markets and raised fears about inflation and global slowdown. Wednesday’s announcement follows other trade frameworks recently unveiled with the Philippines and Indonesia, all part of a broader White House effort to renegotiate trade imbalances while avoiding economic fallout.

Tariffs’ Limited Pass-Through to Prices

Despite fears of rising consumer costs, some economists say the tariff impact has been muted. Goldman Sachs economist David Mericle noted that price pass-through appears to be less severe than during the 2019 tariff rounds.

Still, some companies are reporting consequences:

Hasbro took a $1 billion write-down related to asset values in light of the new tariff environment, even though it beat adjusted profit expectations.
Texas Instruments issued a cautious outlook, warning that uncertainty from tariffs could slow demand. Its stock dropped 11.3%.
GE Vernova, on the other hand, surged 10.5% after raising its revenue guidance and saying that tariff-related inflation may fall toward the low end of its $300–$400 million projection.

Meme Stocks Make Noise Again

In parallel, a new wave of retail investor enthusiasm hit certain beaten-down names. Stocks like Krispy Kreme jumped 25.4%, and GoPro soared 51.1%, as traders sought the next “meme stock” star. However, not all speculative plays held gains: Opendoor Technologies, which had recently tripled in value, fell 16.6%.

Market Context & Bond Yields

Despite ongoing geopolitical and trade uncertainty, the U.S. economy remains resilient. Inflation edged up in June, but not alarmingly so, and consumer spending continues to support growth.

In the bond market, yields nudged higher. The 10-year Treasury yield rose to 4.37% from 4.35% the previous day, signaling cautious optimism about economic growth.

Japan’s Measured Response

Japanese automakers and officials offered no public comments on the trade deal, but behind the scenes, some expressed relief. Japanese business leaders reportedly remain cautious in public statements due to Trump’s unpredictability.

Still, the market’s response speaks volumes — investors are betting on reduced trade tension and a smoother global economic outlook heading into the second half of 2025.