Updates with market open prices

By Nikhil Sharma and Pranav Kashyap

July 23 (Reuters) - Wall Street climbed on Wednesday after President Donald Trump secured a trade deal with Japan, sparking optimism for a flurry of new agreements as the August 1 deadline looms.

The pact will slash tariffs on the Japanese auto sector to 15% from 27.5%, with duties on other goods also dropping to 15% from 25%.

At 9:41 a.m. ET, the S&P 500 .SPX gained 20.11 points, or 0.31%, to 6,329.73 and the Nasdaq Composite .IXIC gained 39.71 points, or 0.19%, to 20,932.40.

The Dow Jones Industrial Average .DJI rose 215.38 points, or 0.48%, to 44,717.82, closing in on its all-time high.

Meanwhile, Wall Street's "fear gauge," the CBOE Volatility Index .VIX, dipped to its lowest level in nearly two weeks.

As U.S. and EU officials head into crucial trade talks, hopes are high for a breakthrough agreement. However, the European Commission signaled it's ready to play hardball , preparing to seek approval for 93 billion euros ($109 billion) in counter-tariffs on American goods.

"The United States has been working very hard on trying to get a lot of trade deals in time before the August 1st deadline, and it seems like they're starting to get some momentum. So I do think this is a very positive sign," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

Investors are now laser-focused on earnings from the "Magnificent Seven" — the market's star performers who have powered stocks to record highs.

Tesla TSLA.O and Alphabet GOOGL.O are set to report after the bell on Wednesday. With AI optimism running high and valuations stretched, expectations for these tech giants are sky-high, leaving little margin for disappointment.

In earnings-focused moves, GE Vernova's GEV.N shares climbed 13.7% to an all-time high, as the power equipment maker raised its current-year revenue and free cash flow forecasts after beating Wall Street estimates for second-quarter profit.

Texas Instruments TXN.O tumbled 12.7% after its quarterly profit forecast failed to impress investors, as it pointed to weaker-than-expected demand for its analog chips from some customers and underscored tariff-related uncertainty.

The earnings also weighed on its peer analog chipmakers, with NXP Semiconductors NXPI.O, Analog Devices ADI.O and ON Semiconductor ON.O falling between 3.5% and 5.6%.

Toymaker Hasbro HAS.O slipped 2.4% even after raising its annual revenue forecast.

A 1.7% drop in AT&T T.N kept the communications sector .SPLRCL in the red, with all other sectors in positive territory. The company's stock dropped despite beating quarterly profit estimates.

In economic data, existing home sales numbers for June are due on the day. Thursday's weekly jobless claims numbers and S&P Global's flash PMI data will be closely assessed to gauge economic health in the wake of tariff uncertainties.

Following a mixed set of economic data last week, traders have ruled out an interest rate cut by the Federal Reserve next week. Odds for a September reduction stand at 58%, according to the CME FedWatch tool.

The Fed's July meeting will follow on the heels of mounting concerns about its independence amid political interference and President Trump's persistent attacks on Chair Jerome Powell for his reluctance to cut rates.

Advancing issues outnumbered decliners by a 2.22-to-1 ratio on the NYSE and by a 1.76-to-1 ratio on the Nasdaq.

The S&P 500 posted 30 new 52-week highs and two new low, while the Nasdaq Composite recorded 48 new highs and eight new lows.

(Reporting by Nikhil Sharma and Pranav Kashyap in Bengaluru; Editing by Maju Samuel)

((Nikhil.Sharma@thomsonreuters.com; pranav.kashyap@tr.com))