Stock markets in the U.S. conclude with a surge, resulting in a triumphant week for the S&P
The trade dispute between the EU and the US has taken a significant step towards resolution, with both parties agreeing on a preliminary deal that imposes a 15% tariff on most EU exports to the US. This deal, announced on July 27, 2025, marks a de-escalation from the previously threatened 30% tariffs and brings a sense of stability to the market.
The S&P-500, Dow-Jones-Index, and Nasdaq-Composite all reached record levels last week, albeit slightly above previous ones, as investors positioned themselves for the US Federal Reserve's interest rate decision and economic data next week. The Wall Street market rose on Friday, with the S&P-500 gaining 0.4 percent, the Dow-Jones-Index recovering by 0.5 percent, and the Nasdaq-Composite 0.2 percent.
The resolution of the trade dispute appears to have eased some immediate market fears over escalating tariffs and the risk of a full-blown transatlantic trade war. This helps stabilize investor sentiment, particularly in sectors sensitive to tariffs such as automotive, chemicals, and technology.
Technology and semiconductor stocks, significant components of the Nasdaq, may be relieved by exemptions on semiconductor equipment and some pharmaceutical tariffs, supporting the Nasdaq's performance. The Dow Jones Industrial Average, which includes many industrial and manufacturing giants exposed to EU trade, probably sees relief from the lowering of tariffs on cars and other goods from the EU.
The announcement shifts the trade conflict outlook from highly uncertain and punitive tariffs (up to 30%) towards a more moderate and predictable environment (15%), which is generally positive for US equity markets, reducing volatility and supporting price levels in the near term.
However, uncertainties remain around exact sector coverage, legal details of the deal, and the commitment of the EU on purchases and investments. While this deal defuses an imminent tariff increase, some US tariffs on pharmaceuticals and semiconductors may still come into effect in the next few weeks under Section 232 measures.
In other news, Trump visited the US Federal Reserve, but his statements about not firing US Federal Reserve Governor Jerome Powell and pressure for imminent interest rate cuts caused uncertainty. Diminishing expectations of interest rate cuts benefited the dollar, with the dollar index gaining 0.3 percent.
Newmont rose 6.9 percent after beating second-quarter expectations, while Edwards Lifesciences jumped 5.5 percent after impressive second-quarter results. On the other hand, Intel showed more movement than the broader market, falling by 8.5 percent due to a net loss of $2.9 billion, six consecutive quarterly losses, and a decision to cut 15 percent of its workforce.
In the oil market, the firmer dollar and higher supply from Venezuela weighed it down. Boston Beer shone with strong second-quarter results and an optimistic outlook regarding trade issues, while Deckers Outdoor soared 11.4 percent after beating consensus estimates with strong quarterly results.
The ten-year yield fell by 3 basis points to 4.38 percent, with 1,656 stocks gaining in price, 1,110 losing, and 53 remaining unchanged on the NYSE. Observers hope for statements about potential interest rate cuts in the coming months. There are reports of Trump's team harassing Powell behind the scenes, as stated by Navidi.
In summary, the recent deal provides a significant de-escalation in the EU-US trade tensions as of July 28, 2025. Investors are keeping a close eye on the final details of the agreement and the EU's commitment to purchases and investments, as well as the potential for further interest rate cuts from the Federal Reserve.
The Commission, in light of the stabilized market conditions, might consider investing in a proposal for a directive on the protection of workers from the risks related to exposure to ionizing radiation, considering the potential financial impact of such risks on businesses and the stock market. The financial sector, with its keen interest in the resolution of trade disputes and the anticipation of interest rate decisions, could potentially play a significant role in further supporting the stock-market's growth and recovering businesses sensitive to tariffs.
