US stocks extended their record-breaking run on Wednesday after Washington and Tokyo struck a deal to slash proposed tariffs, fuelling optimism about further trade breakthroughs. The S&P 500 rose 0.4 per cent in early trading, while the Dow Jones climbed 232 points or 0.5 per cent, and the Nasdaq added 0.3 per cent.The momentum followed US President Donald Trump’s announcement of a trade framework with Japan that would impose a reduced 15 per cent tariff on Japanese imports, instead of the previously threatened 25 per cent rate set to take effect on August 1. The change was widely welcomed by investors.“It’s a sign of the times that markets would cheer 15 per cent tariffs,” said Brian Jacobsen, chief economist at Annex Wealth Management, as quoted by news agency AP. “A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.”The Nikkei 225 index in Tokyo surged 3.5 per cent, leading global gains. Japanese car stocks rallied sharply. Toyota jumped over 14 per cent, Mitsubishi 13 per cent and Nissan 8 per cent, reported AFP. The deal also lowers US tariffs on Japanese automobiles to 15 per cent, offering a reprieve for a sector that accounts for nearly 8 per cent of Japan’s workforce.European markets followed suit. France’s CAC 40 rose 1.2 per cent, Germany’s DAX gained 0.6 per cent, and London’s FTSE 100 touched a new high before settling 0.4 per cent higher.Trump also announced similar agreements with the Philippines and Indonesia, reducing levies and raising hopes for additional deals before the upcoming tariff deadline. “News of a trade agreement between the US and Japan is fostering optimism… that further deals might be reached before punishing tariffs come into force,” said AJ Bell’s Russ Mould, as per news agency AFP.Meanwhile, corporate earnings reflected mixed reactions to existing tariffs. Hasbro took a $1 billion write-down, though said tariffs had not yet affected profit margins. Texas Instruments fell 11.3 per cent despite beating expectations, after cautioning that uncertainty around tariffs may dent demand. On the other hand, GE Vernova rose 10.5 per cent after strong results and an improved revenue forecast, even as it expected a tariff-related cost between $300-$400 million.Investors also chased speculative gains. Krispy Kreme soared 25.4 per cent and GoPro 51.1 per cent, while recent favourite Opendoor dropped 16.6 per cent as the meme stock frenzy shifted.As per AFP, the broader outlook remains upbeat with hopes pinned on Alphabet, Tesla and Intel earnings. Analysts say strong AI-related performance could spark another tech rally.In bond markets, the 10-year US Treasury yield edged up to 4.37 per cent. Globally, currencies and oil prices saw mild movement, with Brent down 0.4 per cent at $68.32 per barrel.
