European shares closed decrease on Monday, and the euro slid, as markets digested a long-awaited EU-US commerce settlement introduced on Sunday.
On the opposite aspect of the Atlantic, the S&P 500 and Nasdaq closed at file highs, once more, firstly of every week jam-packed with huge bulletins. Maintain studying to search out out extra.
EU-US Commerce Settlement
On Sunday, European Fee President Ursula von der Leyen travelled to Scotland to satisfy US President Donald Trump.
The 2 leaders struck a commerce settlement which imposes a 15% tariff on most EU exports to the US. While this contains automobiles, which had beforehand confronted a tariff of 27.5%, it excludes metal and aluminium, which is able to proceed to face duties of fifty%.
Some sectors, together with plane components, will keep away from tariffs, however an inventory of duty-free merchandise has but to be finalised, with wines and spirits nonetheless being negotiated.
Trump additionally stated that the EU would enhance funding within the US by $600 billion and spend $750 billion on vitality.
Various European leaders have subsequently voiced displeasure with the settlement.
German Chancellor Friedrich Merz stated it will “considerably harm” the German economic system however conceded that the Brussels negotiating staff “couldn’t count on to attain any extra”.
French Prime Minister Francois Bayrou stated it was a “darkish day” and likened the settlement to “submission”.
The Market Response
On Monday morning, European shares initially reacted positively to the information, as buyers embraced readability after months of uncertainty. Nevertheless, the positive aspects did not final.
In some unspecified time in the future through the day, the market appeared to grasp that though tariffs of 15% had been preferable to the 30% being threatened, they’re significantly increased than the common 4.8% levy which had been in drive pre-Trump.
The Germany 40 index, which had opened 0.86% increased on Monday morning, reversed course and closed the session down by 1.02%. Equally, France’s CAC40 opened 1.15% increased however closed with a lack of 0.43%.
The euro additionally slid, falling 1.35% in opposition to the US greenback and 0.78% in opposition to the British pound. Nevertheless, the euro stays up 12% in opposition to the greenback yr up to now.
Throughout the Atlantic, Wall Road had a reasonably muted session, however the S&P 500 and Nasdaq nearly managed to shut at file highs after gaining 0.02% and 0.33% respectively. Conversely, the Dow Jones settled down by 0.14%.
The session marked the sixth consecutive day of file closes for the benchmark S&P 500 index and its fifteenth file shut of the yr.
What to Look Out for This Week
It’s a busy week when it comes to probably market transferring bulletins, with a slew of necessary financial information and massive company earnings reviews due over the approaching days.
Financial Bulletins
On Wednesday, the Federal Reserve is extensively anticipated to carry rates of interest regular for a fifth consecutive assembly, regardless of President Trump ratcheting up strain on the central financial institution.
Rate of interest futures traded on the CME Group present a 97% probability that charges will stay unchanged, in response to CME’s FedWatch instrument.
Consequently, market members will probably be extra centered on subsequent feedback from Fed Chair Jerome Powell for any indication as to the place rates of interest will probably be heading later within the yr.
The next day, the Private Consumption Expenditures Index – the Fed’s most well-liked measure of inflation – will probably be launched, which is able to present what impact Trump’s tariffs have to this point had on costs.
Different necessary occasions within the financial calendar this week embody:
-
Wednesday, 29 July:
- Germany Gross Home Product (GDP) Q2 2025
- US GDP Q2 2025
-
Thursday, 30 July:
- Germany Shopper Worth Index (CPI) July 2025
- Friday, 1 August:
Earnings Watch
To this point, 170 corporations from the S&P 500 have launched quarterly earnings, with 83% beating expectations.
This week is ready to be the busiest of earnings season, with greater than 150 corporations from the S&P 500 scheduled to report.
Amongst these corporations are 4 of the so-called Magnificent Seven, with Microsoft and Meta Platforms slated for Wednesday and Apple and Amazon for Thursday.
Different notable earnings bulletins embody:
-
Tuesday, 29 July:
- Visa
- Procter & Gamble
- UnitedHealth
- Boeing
- Wednesday 30 July:
- Thursday, 31 July:
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