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Lutnick confident US will secure EU trade deal

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Verizon boosts annual profit forecast, shares rise

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S&P 500 +0.56%, Nasdaq +0.73%, Dow +0.49%

(Updates with afternoon trading)

By Noel Randewich and Nikhil Sharma

July 21 (Reuters) - The S&P 500 and the Nasdaq hit

record highs on Monday, lifted by Alphabet and other megacaps

ahead of several earnings reports this week, while investors bet

on potential trade deals to blunt economic damage from the Trump

administration's global tariffs.

Google-parent Alphabet rallied over 2% ahead of

its quarterly report on Wednesday. It and Tesla, also

reporting on Wednesday, kick off earnings from the so-called

"Magnificent Seven", and their results may set the tone for

other heavyweight companies reporting in the next several days.

Tesla traded near flat, while Apple ( AAPL ) and Amazon ( AMZN )

each rose about 1%.

Verizon rallied 5% after the telecommunications

company boosted its annual profit forecast.

Analysts on average expected S&P 500 companies to report a

6.7% increase in earnings for the second quarter, with Big Tech

driving much of that gain, according to LSEG I/B/E/S.

"So far, companies that have reported have, in general, met

or beat guidance from the prior quarter, and we haven't seen any

degradation either in corporate profits or consumer spending,"

said Tom Hainlin, national investment strategist at U.S. Bank

Wealth Management in Minneapolis.

With U.S. President Donald Trump's August 1 tariff deadline

approaching, the S&P 500 is up about 8% year to date,

with investors betting the economic damage from tariffs will be

less than feared.

U.S. Commerce Secretary Howard Lutnick said on Sunday he was

confident the United States could secure a trade deal with the

European Union, even as EU members explored possible

counter-measures against the United States.

Trump has threatened 30% tariffs on imports from Mexico and

the EU, and sent letters to other trading partners, including

Canada, Japan and Brazil, setting tariffs ranging from 20% to

50%.

The S&P 500 was up 0.56% at 6,332.05 points.

The Nasdaq gained 0.73% to 21,048.31 points, while the

Dow Jones Industrial Average was up 0.49% at 44,560.36 points.

Nine of the 11 S&P 500 sector indexes rose, led by

communication services, up 1.93%, followed by a 1.27%

gain in materials.

Investors focused on how tariff uncertainty is impacting the

U.S. economy will scrutinize jobless claims data and the July

business activity report, expected on Thursday.

They will also watch a speech by Federal Reserve Chair

Jerome Powell on Tuesday for clues about when the Fed might cut

interest rates, especially after mixed inflation signals last

week.

Traders have largely ruled out a July rate cut, and they now

see a greater than 50% chance the Fed will cut by its September

meeting, according to CME Group's FedWatch tool.

Advancing issues outnumbered falling ones within the S&P

500 by a 1.7-to-one ratio.

The S&P 500 posted 17 new highs and 6 new lows; the Nasdaq

recorded 88 new highs and 45 new lows.