Tech stocks drive Nasdaq and S&P to new highs; trade deal reached with Vietnam.

Trump Announces Trade Agreement with Vietnam, S&P and Nasdaq Hit Record Highs

On July 2, U.S. President Donald Trump announced that the U.S. has reached a trade agreement with Vietnam. He stated on social media that details would be released soon. Trump mentioned that all Vietnamese exports to the U.S. would face a minimum 20% tariff, while goods transshipped through Vietnam would incur a 40% tariff. Vietnam has agreed to reduce tariffs on U.S. products to zero.

U.S.-Japan Trade Tensions

In response to Trump's threat of higher tariffs on Japan, Japanese Prime Minister Kishida emphasized the importance of trade over tariffs to protect national interests. Japan firmly rejected any agreement that would maintain a 25% tariff on automobiles, while the U.S. threatened stricter penalties, including export quotas.

Federal Reserve Interest Rate Outlook

U.S. Treasury Secretary Scott Pruitt indicated that the Federal Reserve might lower interest rates in September or sooner, as tariffs have only caused mild inflation. This news contributed to the S&P 500 reaching a historic high.

U.S. Defense Department on Iran's Nuclear Program

The U.S. Defense Department stated that Iran's nuclear facilities have been destroyed, delaying its nuclear program by 1 to 2 years. However, this claim has faced skepticism from various media outlets.

EU-China Relations

On July 2, European Commission President Ursula von der Leyen met with Chinese Foreign Minister Wang Yi in Brussels. They discussed the upcoming EU-China leaders' meeting, emphasizing the importance of cooperation and mutual benefits in trade.

Stock Market Performance

The three major indices showed mixed results, with the S&P 500 and Nasdaq reaching new highs. The Dow Jones fell slightly by 0.02%, while the Nasdaq rose by 0.94%. Notable tech stocks included Tesla, which increased by 4.97%, and Nvidia, which rose by 2.58%.

Chip Sector Gains

The Philadelphia Semiconductor Index rose by 1.88%, with major players like NXP Semiconductors and TSMC hitting historical highs. The recent "Big and Beautiful" bill passed by the Senate offers a 35% investment tax credit for chip companies building new factories in the U.S. before 2026.

Notable Stock Movements

• Tesla: Q2 deliveries reached 384,122, slightly below analyst expectations but better than pessimistic forecasts.
• Oracle: Shares surged over 5% after announcing a partnership with OpenAI.
• Datadog: Added to the S&P 500, shares rose nearly 10%.

Hong Kong Market Activity

On July 2, net purchases of Hong Kong stocks reached HKD 5.036 billion, with significant investments in the Tracker Fund and Meituan, while Alibaba and Tencent saw net sell-offs.

Upcoming Economic Data

Key economic indicators to watch include the U.S. unemployment rate and non-farm payrolls, scheduled for release later today.

Overall, the market remains responsive to geopolitical developments and economic data, with significant movements in tech and semiconductor stocks.