The unexpected US-Japan trade deal announced Wednesday may end up being a tipping point for the fortunes of many sectors in the stock market — with losers turning into winners, and vice versa.

Stocks rose Wednesday after President Donald Trump announced the U.S. had reached a trade deal with Japan, lifting hope for further agreements being made.

Chinese and most European indexes rose, and Japan’s TOPIX hit a record high, on trade optimism. Are 15% tariffs the new benchmark for trading with the U.S.? WSJ’s Kim Mackrael discusses. Plus, Tesla’s profit plunges as EV sales continue to drop,

President Trump has announced a flurry of trade deals that will relieve some pressure on companies and consumers from sharply higher tariffs on imports from Japan and a handful of other Asian countries.

While recession odds have been dialed back in recent weeks, economists surveyed by The Wall Street Journal still see 33% odds of one coming within a year, compared with 22% at the start of 2025. Meanwhile, earnings estimates for the S&P 500 compiled by research group FactSet are 3% lower since then, the Journal said.