MARKETS USA/Equities mixed - US/EU tariff agreement provides little impetus

DJ MARKETS USA/Equities mixed - US/EU tariff agreement provides little impetus

By Steffen Gosenheimer

DOW JONES – Following the framework trade agreement between the US and the EU and ahead of the US Federal Reserve's interest rate decision scheduled for Wednesday, little was happening on the US stock markets on Monday. The fact that the tariff agreement provided little impetus was likely due to the fact that, as is often the case, many details were missing, meaning that little seems set in stone. Investors were also reportedly waiting for further agreements in light of the expiration of the grace period at the end of the week. They are also awaiting progress in the talks with China, which ends on August 12.

The S&P 500 and the Nasdaq Composite (+0.3%), which were virtually unchanged at the end of trading, had already achieved new record highs after small gains in early trading. The narrower Dow Jones Industrial Average closed 0.1 percent lower at 44,838 points. According to initial counts, there were 957 gainers (Friday: 1,656), 1,823 losses (Friday: 1,110), and 55 unchanged (Friday: 53) on the NYSE.

According to US President Donald Trump, the US will impose a base tariff of 15 percent on EU goods. The significantly higher tariffs of 50 percent on steel imports will initially remain in place. As part of the agreement, the EU also agreed to purchase $750 billion worth of energy from the US and to invest $600 billion in the US.

The future tariffs are ten times higher than the approximately 1.5 percent before the trade dispute, commented the economists at Carmignac. On the other hand, an even worse scenario with tariffs of 30 percent has been avoided. In view of the US support for Ukraine, strategic calculations likely played a significant role on the part of the EU. Meanwhile, the investment commitment and the planned US energy imports are likely more wishful thinking than a realistic prospect.

Many players were already looking ahead to the meeting of the US Federal Reserve. An interest rate change is not expected, even though Trump is constantly calling for rate cuts and even though individual Fed governors would apparently support a rate cut. However, the Fed is likely to remain on the sidelines for now and wait to see the effects of the tariff policy.

The dollar saw a significant uptrend in the foreign exchange market. The euro fell to $1.1592, down from around $1.1740 late Friday. US tariffs are likely to push up inflation in the US and lower inflation in the eurozone; this increases the possibility that the ECB will cut interest rates more than currently expected, while the US Federal Reserve could exercise restraint, explained foreign exchange experts at Barclays.

On the bond market, yields rose by 4 basis points to 4.42 percent in the ten-year range.

Oil prices rose by almost 3 percent. The agreement with the EU dampened concerns about a global economic slowdown and the resulting decline in demand for oil. Some traders saw Trump's shortened ultimatum to Russia to reach a peace agreement with Ukraine as a price driver. They argued that it increased the risk of further sanctions against Russia, which continues to export oil.

Energy stocks ahead - Tesla very strong

Among the day's winners were stocks from the energy sector, whose S&P 500 sub-index rose by 1.2 percent.

Among individual stocks, Tesla was in high demand, rising 3.0 percent. General Motors gained 0.1 percent, and Ford fell 1.7 percent. On the one hand, the lower tariffs on foreign cars may have had a slowing effect, while on the other hand, tariffs on US car imports into the EU are now no longer in place. Regarding Tesla, it was said that the company could benefit from the trade agreement because it operates a large factory in Germany. The fact that Tesla reached a $16.5 billion chip supply deal with Samsung Electronics may also have supported the share price.

In the technology sector, restraint prevailed. During the course of the week, four of the so-called "Magnificent Seven" companies, Apple (+0.1%), Amazon (+0.6%), Meta (+0.7%), and Microsoft (-0.2%), released their quarterly results. Alphabet declined 0.3 percent, while Nvidia gained 1.9 percent.

Nike rose 3.9 percent, driven by an upgrade by JP Morgan.

 INDEX last +/- % absolute +/- % YTD
DJIA 44,837.56 -0.1% -64.36 +5.5%
S&P 500 6,389.77 +0.0% 1.13 +8.6%
NASDAQ Comp 21,178.58 +0.3% 70.27 +9.3%
NASDAQ 100 23,356.27 +0.4% 84.02 +10.8%


FOREIGN CURRENCY last +/- % 0:00 Fri, 5:20 PM % YTD
EUR/USD 1.1592 -1.4% 1.1762 1.1733 +13.6%
EUR/JPY 172.22 -0.9% 173.71 173.29 +6.6%
EUR/CHF 0.9313 -0.5% 0.9358 0.9348 -0.3%
EUR/GBP 0.8680 -0.8% 0.8752 0.8735 +5.8%
USD/JPY 148.57 +0.6% 147.69 147.70 -6.1%
GBP/USD 1.3355 -0.6% 1.3441 1.3431 +7.4%
USD/CNY 7.1580 +0.1% 7.1481 7.1471 -0.8%
USD/CNH 7.1823 +0.3% 7.1643 7.1673 -2.3%
AUS/USD 0.6519 -0.8% 0.6573 0.6557 +6.2%
Bitcoin/USD 117,856.15 -1.2% 119,287.55 115,368.50 +26.1%

Crude oil last VT settlement. +/- % +/- USD % YTD
WTI/Nymex 67.02 65.16 +2.9% 1.86 -9.5%
Brent/ICE 70.37 68.44 +2.8% 1.93 -9.7%


METALS last previous day +/- % +/- USD % YTD
Gold 3,317.77 3,336.81 -0.6% -19.04 +27.2%
Silver 32.93 32.45 +1.5% 0.48 +16.3%
Platinum 1,196.64 1,195.14 +0.1% 1.50 +36.5%
Copper 5.59 5.76 -3.0% -0.17 +42.6%
YTD based on the previous day's closing price
(Information provided without guarantee)

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(END) Dow Jones Newswires

July 28, 2025 4:17 p.m. ET (8:17 p.m. GMT)

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