(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, July 23 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

What had been a quiet week in markets was electrified by a

U.S.-Japan trade deal

overnight, catapulting Japan's Nikkei stock index up more

than 3% to its best level in a year, prodding

Japanese 10-year yields

to their highest point in almost 17 years by nudging

the yen

up.

The deal - which cuts planned U.S. tariffs on Japanese goods

to 15% from 25% in return for $550 billion of Japanese

investments and loans in America - drove a spike in

auto stocks worldwide

, with Toyota's share price jumping 14%. Separately, local

media reports said Japan's embattled Prime Minister Shigeru

Ishiba may now resign after all following poor weekend election

results.

He later denied that

.

* The agreement with Japan spurred hopes for other major

deals before next week's tariff deadline, lifting European

bourses too. Meanwhile, futures on record high Wall Street stock

indexes rose further, and the dollar weakened broadly.

* With the focus on what other deals might happen before the

August 1 tariff deadline, U.S. President Donald Trump said

representatives from the European Union are due for trade

negotiations with the United States on Wednesday and Treasury

Secretary Scott Bessent said U.S. and Chinese officials will

meet in Stockholm next week.

* Wall Street now switches back to earnings season, with two

of its so-called "Magnificent Seven" megacap firms - Alphabet

and Tesla - reporting after the bell on Wednesday. The

performance of the former, in particular, will test the

durability of the artificial intelligence theme that's still

having profound effects on the whole economy.

Today I'll take a look at just how

the AI boom - and the data center and infrastructure boom

around it - is still flattering U.S. GDP growth.

Today's Market Minute

* U.S. President Donald Trump struck a trade deal with Japan

that lowers tariffs on auto imports and spares Tokyo from

punishing new levies on other goods in exchange for a $550

billion package of U.S.-bound investment and loans.

* European shares climbed on Wednesday, buoyed by hopes of a

trade agreement between the European Union and United States

after Trump's deal with Japan sent Japanese stocks to a one-year

high.

* China has broken ground on what it says will be the world's

largest hydropower project, a $170 billion feat capable of

generating enough electricity each year to power Britain.

* Wall Street's concentration in the red-hot tech sector is, by

some measures, greater than it has ever been, eclipsing levels

hit during the 1990s dotcom bubble. ⁠ROI markets columnist Jamie

McGeever asks if this means history is bound to repeat itself.

* The first half of 2025 featured a slew of U.S. electricity and

power milestones, with generation, demand and retail prices all

scaling records during January to June. Get the key data points

from ROI columnist Gavin Maguire.

Chart of the day

In the trade deal announced late Tuesday, Japan's auto

sector, which accounts for more than a quarter of its U.S.

exports, will see existing tariffs cut to 15% from levies

totaling 27.5% previously. Duties that were due to come into

effect on other Japanese goods from August 1 will also be cut to

15% from 25%. Two-way trade between the two countries reached

nearly $230 billion in 2024, with Japan running a trade surplus

of nearly $70 billion. Japan is the fifth-largest U.S. trading

partner in goods.

Japan's side of the deal involves U.S. investments and includes

loans and guarantees from Japanese government-affiliated

institutions of up to $550 billion to enable Japanese firms "to

build resilient supply chains in key sectors like

pharmaceuticals and semiconductors," according to Prime Minister

Ishiba. Japan is the largest foreign investor in the United

States, with an investment position of $819 billion at the end

of 2024. Japan will also increase purchases of agricultural

products such as U.S. rice, a U.S. official said.

Today's events to watch

* U.S. June existing home sales (10:00 AM EDT); Canada June

house price index (8:30 AMEDT ); euro zone July consumer

confidence (10:00 AM EDT)

* U.S. corporate earnings: Alphabet, Tesla, IBM, AT&T,

General Dynamics, Boston Scientific, CSX, CME, Thermo Fisher

Scientific, Hilton, Otis, Chipotle, Northern Trust, Moody's,

Hasbro, Fiserv, Lamb Weston, Teledyne, O'Reilly Automotive,

Globe Life, Crown Castle, NextEra, Las Vegas Sands, Packaging

Corp of America, Rollins, Lennox, United Rentals, Molina

Healthcare etc

* U.S. Treasury sells $13 billion of 20-year bonds

* German Chancellor Friedrich Merz hosts French President

Emmanuel Macron for talks in Berlin

* UK Prime Minister Keir Starmer and India's Prime Minister

Narendra Modi meet in London

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.