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Indexes: Dow down 0.02%, S&P 500 up 0.04%, Nasdaq up 0.24%

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US, EU avert trade war with 15% tariff deal

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Nike ( NKE ) rises after JP Morgan upgrades stock

By Nikhil Sharma and Pranav Kashyap

July 28 (Reuters) -

The S&P 500 and the Nasdaq trimmed their gains after briefly

reaching record highs on Monday, as investors looked past the

U.S.-EU trade pact and braced for a week filled with megacap

earnings, a Fed meeting and an impending U.S. tariff deadline.

President Donald Trump and European Commission President

Ursula von der Leyen unveiled a trade framework on Sunday,

slashing EU import tariffs to 15% - half the previously

threatened rate set for August 1.

At 11:30 a.m. ET, the S&P 500 gained 2.46 points, or

0.04%, to 6,390.99, and the Nasdaq Composite rose 51.08

points, or 0.24%, to 21,159.40.

The Dow Jones Industrial Average fell 10.77 points,

or 0.02%, to 44,891.15. The blue-chip index was about 190 points

away from its December 4 record high.

Last week, a string of deals with major U.S. trade

partners, including Japan, Indonesia and the Philippines, fueled

robust gains on Wall Street.

The S&P 500 and the Nasdaq were up about 28% and 40%,

respectively, from their April lows.

"That August 1st deadline is less of an issue anymore for

financial markets. They're happy that there hasn't been any big

retaliation by the Japanese or the EU, and those talks have gone

more or less as expected," said Bill Sterling, global strategist

at GW&K Investment Management.

The market rally faces a crucial test in the coming days,

with earnings releases from "Magnificent Seven" heavyweights

Meta, Microsoft ( MSFT ), Amazon ( AMZN ) and Apple ( AAPL )

, which could sway broader investor sentiment in either

direction.

Last week, Alphabet's surprise capital spending hike

revived enthusiasm for AI investments, even as Tesla

disappointed by warning of tough quarters ahead amid shrinking

electric vehicle subsidies.

Tesla jumped 3.6% after the automaker signed a $16.5

billion deal to source chips from Samsung Electronics ( SSNLF )

.

Meanwhile, Washington's latest pact with the 27-member EU

bloc has raised expectations that a global trade war could be

averted, as other economies worldwide scramble to finalize

agreements before the August 1 deadline.

The ongoing U.S.-China talks are expected to extend their

fragile trade truce by another three months, while

negotiations

with India are also underway.

A key highlight of the week will be the Fed's two-day policy

meeting starting Tuesday, with traders widely expecting the

central bank to keep interest rates steady. As per the CME

Group's FedWatch tool, odds for a September cut stand at 60.4%.

The meeting comes amid an aggressive campaign by the White House

to pressure the Fed into lowering borrowing costs. Trump on

Friday suggested Powell might be ready to lower interest rates.

Among a deluge of key economic indicators this week,

attention will be on the Personal Consumption Expenditure report

(PCE) - the Fed's preferred inflation measure - and non-farm

payrolls data to gauge how tariffs have affected consumer prices

and the labor market.

Ether-linked companies GameSquare ( GAME ) and BTCS ( BTCS )

were up 1.7% and 4.7%, respectively after Ethereum prices

briefly hit an over seven-month high.

Nike ( NKE ) jumped 3.8% after J.P. Morgan upgraded the stock to

"overweight" from "neutral" and said investors should "just buy

it".

Declining issues outnumbered advancers by a 1.79-to-1 ratio

on the NYSE, and by a 1.44-to-1 ratio on the Nasdaq.

The S&P 500 posted 25 new 52-week highs and two new lows,

while the Nasdaq Composite recorded 58 new highs and 32 new

lows.