July 21 (Reuters) - The S&P 500 and Nasdaq touched fresh record peaks on Monday, as investors hoped for trade breakthroughs and geared up for a week of tech earnings that could set the tone for Wall Street.
At 09:44 a.m., the S&P 500 (.SPX), gained 18.34 points, or 0.29%, to 6,315.13 and the Nasdaq Composite (.IXIC), gained 110.40 points, or 0.53%, to 21,006.05.
The Dow Jones Industrial Average (.DJI), rose 38.06 points, or 0.09%, to 44,380.25, just 1.57% shy of its all-time high.
Investors were hoping for some progress in trade talks after U.S. Commerce Secretary Howard Lutnick on Sunday, who expressed confidence over striking a trade deal with the European Union.
However, EU diplomats said the 27-member bloc is exploring a broader set of possible counter-measures against the United States, as hopes for a breakthrough deal with Washington dwindled.
Trump has threatened to slap 30% tariffs on imports from Mexico and the EU, keeping markets on edge.
The president has also sent letters to other trading partners, including Canada, Japan and Brazil, setting blanket tariff rates ranging from 20% to 50%.
Despite Trump's persistent attacks and the August 1 tariff deadline, the S&P 500 (.SPX), and the Nasdaq (.IXIC), reached new heights recently as investors believed that the economic fallout from tariffs might not be as dire as once feared.
All eyes are on marquee names such as Alphabet (GOOGL.O), and Tesla (TSLA.O), whose results this week will kick off the "Magnificent Seven" earnings parade, and could set the tone for Wall Street.
Shares of Tesla and Alphabet were up 1.7% and 0.5%, respectively.
"There's still a ton of trade uncertainty, and so I think the focus on earnings has given investors some things to be excited about," said Ross Mayfield, investment strategy analyst at Baird.
"There's a lot of optimism around those big tech earnings and AI demand that should continue to help indexes."
On Monday, Verizon (VZ.N), gained 2.2% after boosting its annual profit forecast. The stock also drove the communications sector (.SPLRCL), which emerged as the top gainer among other sectors.
Meanwhile, shares of Domino's Pizza (DPZ.O), rose 2% after the world's largest pizza chain surpassed analysts' expectations for second-quarter U.S. same-store sales.
The week is light on the economic data front, with only notable indicators being weekly jobless claims figures and the July business activity report expected on Thursday.
Investors will closely analyze Federal Reserve Chair Jerome Powell's remarks on Tuesday for any clues on the central bank's next move, especially after last week's mixed inflation signals.
Traders have largely ruled out a July rate cut, and are now pegging the odds at about 60% for a September reduction, according to CME Group's FedWatch tool.
Advancing issues outnumbered decliners by a 2.22-to-1 ratio on the NYSE and by a 2.33-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and four new lows, while the Nasdaq Composite recorded 41 new highs and 20 new lows.
Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Maju Samuel and Shinjini Ganguli
