European shares settle lower as investors gauge mixed earnings, EU-US trade progress
Investors navigated the peaks and troughs around a potential agreement between the two large economies after a busy week of trade discussions with the U.S. culminated in deals with Japan, Indonesia, and the Philippines.
The pan-European STOXX 600 index (.STOXX), opens new tab dropped 0.6% to session lows after U.S. President Donald Trump said there was less chance of an agreement with the EU, but pared losses after EU diplomats reiterated that a deal of 15% duties on European goods was still in the works.
The index last closed 0.2% lower with most regional bourses in red, but on a weekly basis, the STOXX index was on track for modest gains.
"It's hard to spin it as a good deal, but it would at least avoid much higher U.S. tariffs and retaliation from the EU," said Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics.
"The reported deal with the U.S. would take a major downside risk off the table for now, weakening the case for further interest rate cuts."
Also weighing on stocks were elevated bond yields that got a lift after the European Central Bank's comments on Thursday tempered expectations of imminent interest rate cuts. EUR/GVD
Meanwhile, corporate earnings were in full swing.
Puma (PUMG.DE), opens new tab was the biggest percentage loser on the benchmark index, falling 16%, its largest daily drop in more than four months. The sportswear brand cut its full-year outlook and reported weaker-than-expected quarterly results.
London-listed sports retailer JD Sports (JD.L), opens new tab slipped 0.7% after Puma's results.
On the flip side, LVMH (LVMH.PA), opens new tab gained 3.9% after the French luxury group reported quarterly results, with analysts pointing to hopes on the horizon as the group said it saw signs of recovery in the Chinese market.
The broader luxury index (.STXLUXP), opens new tab rose 1.8% and was the top sectoral performer.
Automobile stocks (.SXAP), opens new tab gained 1.4%, boosted by Volkswagen's (VOWG.DE), opens new tab 4.6% rise after the CEO of Europe's biggest carmaker said cost cuts must be accelerated in response to tariffs. Earlier in the session, shares took a hit on the company's slashed full-year sales and profit margin forecasts.
Still, Traton (8TRA.DE), opens new tab, a truck unit of German automaker Volkswagen, fell 4.1%.
Carrefour (CARR.PA), opens new tab gained 5.5% after Europe's biggest food retailer reported its half-year results.
Attention next week will turn to key events, including policy decisions from the Federal Reserve, earnings from several "Magnificent Seven" companies, and Trump's August 1 tariff deadline.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
24 minutes ago
- The Sun
Range Rover to remove convenient feature for next-gen model as designer bizarrely calls it ‘dirty'
THE ELECTRIC Range Rover will not feature a front trunk, according to the designer of the hotly anticipated SUV. The vehicle is yet to officially debut, with only teasers of its design revealed so far - although fans will be pleased to know the EV version closely mirrors that of the combustion-engine model. 4 4 But one convenient feature found in many electric vehicles won't be included - in a decision partly based on customer feedback. The car's designer, Lynfel Owen, recently referred to the front of the car as the "dirtiest part" and questioned why anyone would want to lean against it to use a front trunk. In an interview with CarExpert, Owen said: 'Why would I want to lean against the dirtiest part of the car to put stuff in?' He explained his reasoning in greater detail: 'We spoke to our customers… none of them have an issue [with] lack of storage space. 'The rear cargo space is exactly the same. We haven't had to raise the floor. The only compromise we have to make is we're not able to offer a seven-seat derivative.' Owen has spent the last decade overseeing JLR's transition to electric power, having risen to chief engineer of vehicle engineering for the Range Rover, Range Rover Sport and Defender models. 'I pretty much only ever worked on Range Rover,' he said. 'I've done a few other projects. I didn't work on the [Jaguar] I-Pace. I was working on the previous-generation Range Rover.' To that end, the I-Pace - launched under the Jaguar brand as the first premium all-electric SUV from any manufacturer when it was revealed in 2016 - became infamous for reliability issues, particularly with its electric drivetrain and battery pack. Its poor customer satisfaction prompted Jaguar Land Rover to learn from its failures, focusing on reliability, improved thermal management and customer-centric design in the development of the Range Rover Electric. Owen said: 'We're making sure we learn from, you know, our mistakes with respect to I-Pace. 'So we're testing all aspects of the car… we've just had a northern hemisphere winter that we've completed, so we've been doing our low-mu testing on the frozen lakes.' He added: 'Some people have got [chargers] bolted on. Their garage might have two or three cars… [so you don't have to use a] 15 metre cable. 'Cabin comfort. Battery temperature. Whether it's to cool it down, whether it's to warm it up. Recovering heat from the air at minus 15… It also reduces the heating energy consumption by over 40 per cent [compared to I-Pace].' This includes the decision to forgo a front trunk, with the rear cargo volume remaining unchanged from the combustion-engine version and the 117-kWh battery pack accommodated without raising the floor. This approach contrasts with the I-Pace, which offered a small front storage compartment. Indeed, due to packaging constraints, the electric Range Rover will only be available with two rows of seats - which rules out a seven-seat option. While a spare wheel will be offered, it will reduce luggage capacity as it will sit above the cargo floor. Much like the upcoming Range Rover, Mercedes' electric G-Class also lacks a front trunk - although they compensated with a uniquely styled tailgate-mounted cargo box. The electric Range Rover will not compete with the G580, Owen claims, as it offers unmatched off-road capabilities, combined with Range Rover's famed luxury. The electric Range Rover's world premiere is expected later this year, with deliveries expected to begin in 2026.
Reuters
24 minutes ago
- Reuters
Union Pacific nearing agreement to buy Norfolk Southern Bloomberg reports
July 26 (Reuters) - Union Pacific (UNP.N), opens new tab, the largest U.S. railroad operator, could reach an agreement to acquire rival Norfolk Southern (NSC.N), opens new tab as soon as early next week, Bloomberg News reported on Friday, citing people familiar with the matter. Union Pacific had said on Thursday it is in advanced talks to acquire its rival, signaling that a deal to form a $200 billion coast-to-coast rail company could be close - and potentially trigger further consolidation among remaining freight rail giants. Union Pacific declined to comment, while Norfolk Southern did not immediately respond to a Reuters request for comment. The combination, which would be the largest-ever buyout in the sector, would create the first modern West-to-East single-line freight railroad in the United States, significantly affecting how goods from grains to chemicals to autos move across the country. The fact that talks are advancing has surprised many in the rail industry and Wall Street as the U.S. freight rail system already functions as two regional duopolies by point of origin. The talks show how thinking around antitrust issues has shifted under President Donald Trump's administration, with his executive orders aimed at removing anti-competitive barriers and opening the door to potential megamergers in the industry. If completed, the deal would combine Union Pacific's dominant position in the western two-thirds of the U.S. with Norfolk Southern's 19,500-mile network spanning 22 eastern states. Union Pacific is valued at approximately $138 billion, according to LSEG data. The company has been grappling with sluggish automotive volumes and volatile coal shipments as power producers shift to natural gas, which is shipped by pipeline. Norfolk Southern, which is worth about $63 billion, is emerging from a turbulent period that included the ouster of its former CEO amid ethics investigations, a high-profile boardroom clash with activist investor Ancora, and a costly train derailment that set the company back about $1.4 billion.
Daily Mail
24 minutes ago
- Daily Mail
California's minimum wage hike may have cost thousands of jobs
According to the economists behind the study, fast food employment in California dropped by 3.2 percent, while jobs in the same sector grew slightly across the rest of the U.S. 'Our median estimate translates into a loss of 18,000 jobs in California's fast–food sector relative to the counterfactual,' wrote researchers Jeffrey Clemens, Olivia Edwards, and Jonathan Meer. Before the law took effect, California's fast food industry was tracking the same employment trend as the rest of the country, the study found. But after AB 1228 was passed, the sector began to shrink. 'Following AB 1228's enactment, employment in the fast food sector in California fell substantially,' the paper states, citing declines 'even as employment in other sectors of the California economy tracked national trends'. Critics say the figures confirm what many feared: that a massive one–size–fits–all pay hike would push jobs out of reach for the workers it was meant to help. 'When it comes to central planning, history keeps the receipts: Wage controls never work,' wrote Heritage Foundation economist Rachel Greszler in a column reacting to the findings. 'That's because policymakers can set wage laws, but they can't outlaw the consequences.' She warned the law should serve as a wake–up call for other cities – especially Los Angeles, which recently voted to raise wages for hotel and airport workers to $30 an hour by 2028. 'The consequences of that wage hike on the fast–food industry should be a warning sign,' she said. The Wall Street Journal editorial board echoed that message, slamming politicians for 'magical thinking' around wage hikes. 'The Democratic Party's socialist nominee for New York mayor, Zohran Mamdani, has called for increasing the city's minimum wage to $30. Andrew Cuomo, his supposedly more moderate competitor, wants a $20 minimum,' the board wrote. 'These guys will never learn because they don't want to see the world as it really is.' But Governor Gavin Newsom's office has pushed back hard – questioning the integrity of the NBER paper and insisting California's wage law is working as intended. Tara Gallegos, Newsom's deputy director of communications, dismissed the study as politically motivated, telling Fox News Digital that it was 'linked to the Hoover Institution,' which she claimed had previously published 'false or misleading information' about the state's wage policies. She pointed to an October 2024 report in the San Francisco Chronicle, which said the early effects of AB 1228 'defy a lot of the doom–and–gloom predictions' made when the bill was signed. Gallegos also cited a February 2025 study by a UC Berkeley professor, which looked at fast food employment trends through December and found 'no negative effects.' 'Workers covered by the policy saw wage increases of 8 to 9 percent, with no negative wage or employment effects on non–covered workers,' she said. 'No negative effects on fast–food employment.' She added: 'The number of fast–food establishments grew faster in California than in the rest of the U.S.' As for prices, the Berkeley study claimed menu costs rose by only 1.5 percent – about six cents on a $4 hamburger. The NBER paper also looked at whether the law had a knock-on effect in full-service restaurants, which weren't subject to the $20 mandate but compete for the same workers. The authors found smaller but still negative employment effects – a median drop of 2.12 percent. And while critics were quick to blame the law for economic pain, the researchers warned against cherry-picking isolated data. They used placebo inference methods to compare California's job trends with other states – and in most cases, California showed the steepest employment drop.
