Markets Rally as Trade Deals, Sector Gains and Global Optimism Drive U.S. Stocks Higher

U.S. indexes surged on trade deals with Japan and the Philippines, strong sector performances and upbeat global markets, despite a housing sales dip.

The Dow jumped 507.85 points (1.1%) to 45,010.20, the Nasdaq climbed 127.33 points (0.6%) to 21,020.02 and the S&P 500 advanced 49.29 points (0.8%) to 6,358.91.

The U.S. struck major trade deals with Japan and the Philippines. Japan agreed to a 550 billion USD investment, market access and a 15% export tariff. The Philippines will pay 19% duty while accepting U.S. goods tariff-free. Trump claims huge job gains and profit share, boosting investor optimism.

National Association of Realtors released a report showing existing home sales in the U.S. pulled back by more than expected in the month of June. NAR said existing home sales slumped by 2.7% to an annual rate of 3.93 million in June after jumping by 1.0% to a revised rate of 4.04 million in May.

Oil service stocks turned in some of the market's best performances on the day, with the Philadelphia Oil Service Index spiking by 4.1%. Computer hardware stocks were substantially strong, as reflected by the 2.3% surged by the NYSE Arca Computer Hardware Index. Airline, pharmaceutical, networking and healthcare stocks also saw significant strength, moving higher along with most of the other major sectors.

Asia-Pacific stocks moved mostly higher. Japan's Nikkei 225 Index spiked by 3.5% while Hong Kong's Hang Seng Index jumped by 1.6%. The major European markets also moved to the upside on the day. While the French CAC 40 Index surged by 1.4%, the German DAX Index advanced by 0.8% and the U.K.'s FTSE 100 Index rose by 0.4%.

In the bond market, treasuries are giving back ground after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.4 basis points at 4.38%.

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