The S&P 500 has reached record highs, primarily driven by recent trade deals with Japan and Indonesia. The Vanguard S&P 500 ETF achieved an all-time high of 583.20, with additional gains expected. Mixed earnings reports are influencing market sentiments, as companies like Intel posted disappointing losses despite strong revenue, while Deckers showed positive results. Intel’s future guidance suggests continued revenue but also layoffs that could affect profit margins. Trade agreements and earnings performance will be critical to sustaining the rally in the market.
Earlier in the week, trade deals with Japan and Indonesia contributed to pushing the market to record highs, and the possibility of a deal with the European Union adds to optimism. The Vanguard S&P 500 ETF reached an all-time high of 583.20, with a promising outlook for further gains. Key factors influencing the sustainability of this rally include both successful trade negotiations and the mixed results of earnings reports. Some companies, like Intel, reported losses despite exceeding revenue expectations, while others, like Deckers, had brighter earnings news, indicating a divided performance among major players.
Notably, Intel's earnings results fell short of expectations, with a $0.10 per share loss compared to an anticipated profit of $0.01. Although its revenue exceeded expectations at $12.9 billion, the company acknowledged challenges ahead. Intel's future outlook showed possible revenue between $12.6 billion and $13.6 billion for Q3, a figure that surpassed estimates, but layoffs indicated by management's decision to reduce its workforce from over 96,000 to 75,000 by year-end suggest ongoing difficulties. Severance costs associated with these layoffs may impact earnings in upcoming quarters.
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