Wall Street poised for higher open on US–EU deal optimism
President Donald Trump and European Commission President Ursula von der Leyen announced a trade framework on Sunday, halving EU import tariffs to 15% from the 30% rate, threatened for August 1.
At 8:18 a.m. ET, S&P 500 E-minis were up 10.25 points, or 0.16%, Nasdaq 100 E-minis were up 72.25 points, or 0.31%, and Dow E-minis were up 15 points, or 0.03%.
The anticipation of the U.S.-EU deal had propelled the S&P 500 and the Nasdaq to record closes on Friday, with the Dow about 0.4% shy of its all-time high.
A series of agreements with key U.S. trade partners, including Japan, Indonesia and the Philippines, helped Wall Street notch robust gains last week.
"The deal optimism has boosted financial market risk appetite. Futures point to new all-time highs for U.S. equity markets," said Elias Haddad, senior markets strategist at Brown Brothers Harriman.
The latest pact with the 27-member bloc has raised expectations that a global trade war could be averted. Global economies are scrambling to finalize agreements before the Friday deadline.
U.S.-China talks later on Monday are expected to extend their fragile trade truce by another three months, while negotiations with India were still underway.
Markets' unprecedented run will be tested this week with earnings from "Magnificent Seven" tech titans Meta (META.O), opens new tab, Microsoft (MSFT.O), opens new tab, Amazon (AMZN.O), opens new tab and Apple (AAPL.O), opens new tab, which could set the tone for Wall Street.
Last week, Alphabet (GOOGL.O), opens new tab surprised Wall Street with a bold capital spending hike, reviving AI optimism, even as Tesla cast a shadow by warning of tough quarters ahead amid shrinking electric vehicle subsidies.
Tesla rose 1.5% in premarket trading after the automaker signed a $16.5 billion deal to source chips from Samsung Electronics (005930.KS), opens new tab.
A key highlight of the week will be the Fed's two-day policy meeting starting Tuesday, with traders widely expecting the central bank to keep interest rates steady. As per the CME Group's FedWatch tool, odds for a September cut stand at 63%.
The meeting comes amid an aggressive campaign by the White House to pressure the Fed into lowering borrowing costs. Trump on Friday suggested Powell might be ready to lower interest rates.
Among a deluge of key economic indicators this week, attention will be on the Personal Consumption Expenditure report (PCE) - the Fed's preferred inflation measure - and non-farm payrolls data to gauge how tariffs have affected consumer prices and the labor market.
Ether-linked companies Bitmine Immersion Technologies , GameSquare Holdings (GAME.O), opens new tab and BTCS (BTCS.O), opens new tab were up between 2.5% and 7% after Ethereum prices hit over a seven-month high.
Nike (NKE.N), opens new tab rose 4.1% after J.P. Morgan upgraded the stock to "overweight" from "neutral" and said investors should "just buy it".
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
23 minutes ago
- The Independent
British steelmakers boosted by change to EU tariffs
British steelmakers will be able to sell more to the EU tariff-free from Friday in a boost for the beleaguered sector. The EU has agreed to more than double the UK's tariff-free quota for certain steel products in a move the Government described as a 'direct win' from Sir Keir Starmer's deal with the bloc earlier this year. At May's UK-EU summit, Sir Keir and European Commission President Ursula Von Der Leyen agreed to restore Britain's steel quotas to historic levels after they were slashed in March. Business Secretary Jonathan Reynolds said the announcement was 'yet another positive step forward for the UK steel sector' that would give producers 'certainty'. The agreement comes at a difficult time for the industry, which continues to face 25% tariffs on exports to the US. An agreement with President Donald Trump to effectively reduce those tariffs to zero is yet to come into effect, but Britain has been protected from the 50% tariff Mr Trump imposed on steel from the rest of the world last month. UK Steel director general Gareth Stace said Friday's change was 'excellent news' for the sector that had been 'plagued by problems' in exporting steel to the EU. He added: 'The quota will restore historic trade flows and is good news for both UK steelmakers and their EU customers.' The decision means the UK can export 27,000 tonnes of 'category 17' steel – which includes angles and sections of steel – to the EU each quarter without paying tariffs. The figure had been cut to 10,000 tonnes after the EU introduced a cap intended to prevent a single exporter dominating the market. In total, the UK exports around 2.4 million tonnes of steel to the EU, worth nearly £3 billion and accounting for 75% of British steel exports. Ministers expect the change to help protect jobs in the industry, which has been a priority for the Labour Government since coming to power. In April, the Government used an almost unprecedented weekend recall of Parliament to take control of British Steel to prevent the shutdown of its blast furnaces and maintain the UK's primary steel-making capacity. British Steel's interim chief operating officer Lisa Coulson said: 'The removal of EU tariffs on British-made steel is a significant boost to our business. 'The EU is an important market to us, particularly for the products our highly skilled colleagues manufacture in Scunthorpe, Teesside, and Skinningrove.' But Conservative shadow business secretary Andrew Griffith described the quota as 'tiny' and 'embarrassing from a Government which has nothing to show on removing the US tariffs on steel which the PM claimed to have delivered back in May'. He added: 'It's a paltry return for giving up 12 years of fishing rights and tying the energy costs of every business to a higher cost EU emissions regime over which the UK will have no say. 'When Labour nationalised British Steel we said they had no plan. This government by press release shows we were right.'
Reuters
24 minutes ago
- Reuters
‘America First' agenda could leave USD behind
NEW YORK, July 31 (Reuters) - Europe and Asia could leverage U.S. President Donald Trump's "America First" strategy for their own benefit, eventually spurring the development of regional tripolar FX blocs that could erode the dominance of the U.S. dollar and reshape global markets. The dollar has struggled this year, especially since Trump's April 2 tariff announcement. While the currency is on pace for one of its strongest weeks this year after jumping around 1% on Monday following the announcement of U.S.-EU trade deal, this short-term move doesn't change the long-term trends that could undermine the greenback's position. Economic dominance in the future could largely depend on access to affordable, efficient energy to power artificial intelligence technologies. And in the race to dominate the industries of the future, the U.S. is arguably going in reverse. It's retreating from the renewables space, as seen in the administration's recent move to eliminate many clean energy subsidies, opens new tab. The president appears to be making the bet that the U.S. can maintain energy dominance indefinitely by relying on its own fossil fuel resources. This could ultimately result in uncompetitive power costs in the future, especially given that China is already dominating in clean energy technologies like solar and electric vehicles. As historian Adam Tooze argues, "for the first time in two centuries the West is no longer the leader in future technologies but the follower." While Trump may be seeking to enhance American self-sufficiency, the administration's policies may actually be increasing the country's dependency on foreign capital. Trump's recently passed budget bill – which looks pretty ugly to fiscal watchdogs despite its name – could cement the U.S.'s position as the world's biggest capital importer by adding an expected $3.4 trillion to the U.S. deficit over the next decade, according to estimates by the nonpartisan Congressional Budget Office, potentially locking in 6% to 7% budget deficits for years. Importantly, the U.S. has also been running current account deficits of roughly 4% over the past several years, and this widened to 6% of GDP in Q1 2025, according to the U.S. Bureau of Economic Analysis. By spending beyond its means and running these twin deficits, the U.S. will continue to require large amounts of foreign capital inflows. But unfortunately for Washington, this capital may soon be harder to come by, if both Europe and Asia seek to keep more of it closer to home. Europe is pushing for increased defense spending, as seen in its new goal to spend 5% of GDP on defense in the coming decade. While the bloc has agreed to increase U.S. energy purchases through the recently announced U.S. trade deal, much of that agreement remains up in the air and the volumes suggested are pretty unrealistic. Meanwhile, Asia has begun to trade more internally, as China has been focusing on export diversification. A growing regionalization of supply chains began during the pandemic and appears to be accelerating as Trump seeks to drive production back to the U.S. and all major global powers focus on securing regional raw material access (e.g., rare earths and other critical minerals) for national security purposes. This shift could eventually create the foundation for true regional FX blocs across Asia, Europe and the Americas. This development would have a major impact on the global economy, currency values and capital markets, arguably providing a more balanced global economy with three poles of supply and demand, each attuned to their own regional dynamics rather than the current set-up whereby the global economy responds primarily to the Federal Reserve and U.S. internal dynamics. Recently, European policymakers have discussed what ECB President Christine Lagarde has termed a 'Global Euro' moment, one built upon a European Savings and Investment Union designed to foster both a European safe-haven asset that could eventually compete with U.S. Treasuries and deeper, more liquid European capital markets to fund European infrastructure and innovation. Of course, this won't be an overnight shift. The dollar remains the world's dominant reserve currency, and the U.S. debt market is estimated to be more than three times the size of Europe's, according to the World Economic Forum. But simply having a larger percentage of European capital stay at home could make a huge difference. Europe's current account surplus has averaged roughly $400 billion over the past few years, and Europe invests roughly $300 billion per year in offshore financial assets, according to the New York Times. Within Asia, Pan Gongsheng, Governor of the People's Bank of China, has recently highlighted China's interest in having the yuan play a larger role in a multi-polar currency world. Other officials soon followed, discussing how China plans to improve home market access for foreign capital while expanding opportunities for the Chinese to invest abroad. While China's capital account remains closed, Asian currencies already primarily trade off the yuan rather than the U.S. dollar. Even though China faces challenges, such as its fight against deflation, its efforts on this front – namely, boosting consumption and reining in excess supply, especially in the renewable energy space across solar, wind and batteries – could ultimately help attract more foreign capital by boosting China's growth profile and corporate earnings. There is obviously no guarantee that these measures will be successful, but the government's intense focus on achieving these goals is evident. The recent decision to provide $12.4 billion in childcare subsidies suggests a potential policy Rubicon has been crossed, as China has typically resisted these types of direct fiscal stimulus measures in the past. In a world of currency blocs, both Europe and Asia could emerge as potential winners, as they erode the U.S.'s position as the world's financial powerhouse. So while many investors may get lost in the short-term currency noise, it might be wise to instead focus on the long-term signal. (The views expressed here are those of Jay Pelosky, the Founder and Global Strategist at TPW Advisory, a NYC-based investment advisory firm. You can follow Jay on Substack at The Tri Polar World, opens new tab). Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI,, opens new tab can help you keep up. Follow ROI on LinkedIn,, opens new tab and X., opens new tab
BBC News
24 minutes ago
- BBC News
Trump's global tariffs 'victory' may come at a high price
In April Donald Trump stunned the world by announcing sweeping new import tariffs – only to put most on hold amid the resulting global financial months later, the US president is touting what he claims are a series of victories, having unveiled a handful of deals with trading partners and unilaterally imposed tariffs on others, all without the kind of massive disruptions to the financial markets that his spring attempt least, so worked to reorder America's place in the global economy, Trump is now promising that the US will reap the benefits of new revenue, rekindle domestic manufacturing, and generate hundreds of billions of dollars in foreign investment and that turns out to be the case – and whether these actions will have negative consequences – is still very much in is clear so far, however, is that a tide that was (gently) turning on free trade, even ahead of Trump's second term, has become a wave crashing across the globe. And while it is reshaping the economic landscape, it hasn't left the kind of wreckage in its wake that some might have predicted - though of course there is often a lag before impact is fully seen. What's more, for many countries, this has all served as a wake up call - a need to remain alive to fresh so, whilst the short term result might be - as Trump sees it - a victory, the impact on his overarching goals is far less certain. As are the long-term repercussions, which could well pan out rather differently for Trump - or the America he leaves behind after his current term. The '90 deals in 90 days' deadline For all the wrong reasons, 1 August had been ringed on international policymakers' calendars. Agree new trading terms with the US by then, they'd been warned – or face potentially ruinous White House trade adviser Peter Navarro predicted "90 deals in 90 days" and Trump offered an optimistic outlook on reaching agreements, the deadline always appeared to be a tall order. And it the time the end of July rolled around, Trump had only announced about a dozen trade deals – some no more than a page or two long, without the kind of detailed provisions standard in past negotiations. The UK was first off the blocks, perhaps inevitably. Trump's biggest bugbear is, after all, America's trade deficit, and trade is in broad balance when it comes to the the baseline 10% applied to most British goods may initially have raised eyebrows, it provided a hint of what was to follow – and in the end came as a relief compared to the 15% rate applied to other trading partners such as the EU and Japan, with whom the US has larger deficits; $240bn and $70bn respectively last year even those agreements came with strings attached. Those countries that weren't able to commit to, say, buying more American goods, often faced higher Korea, Cambodia, Pakistan - as the list grew, and tariff letters were fired off elsewhere, the bulk of American imports are now covered by either an agreement or a presidential decree concluded with a curt "thank you for your attention to this matter". Capacity to 'damage' the global economy Much has been revealed as a result of the good news. The wrangling of the last few months means the most painful of tariffs, and recession warnings, have been dodged. The worst fears – in terms of tariff levels and potential economic fallout (for the US and elsewhere) - have not been realised. Second, the agreement of tariff terms, however unpalatable, reduced much of the uncertainty (itself wielded by Trump as a powerful economic weapon) for better - and for better, in the sense that businesses are able to make plans, investment and hiring decisions that had been paused may now be resumed. Most exporters know what size tariffs their goods face – and can figure out how to accommodate or pass on the cost to growing sense of certainty underpins a more relaxed mood in financial markets, with shares in the US notably gaining. But it's for the worse, in the sense that the typical tariff for selling into the US is higher than before – and more extreme than analysts predicted just six months may have hailed the size of the agreement of the US with the EU – but these are not the tariff-busting deals we equated with tearing down trade barriers in previous greatest fears, the warnings of potential disaster, have receded. But Ben May, Director of global macro forecasting at Oxford Economics, says that US tariffs had the capacity to "damage" the global economy in several ways."They are obviously raising prices in the US and squeezing household incomes," he says, adding that the policies would also reduce demand around the world if the world's largest economy ends up importing fewer goods. Winners and losers: Germany, India and China It's not just about the size of tariff, but the scale of trading relationship with the US. So while India potentially faces tariffs of over 25% on its exports to the US, economists at Capital Economics reckon that, with US demand accounting for just 2% of that nation's gross domestic product, the immediate impact on growth could be news is not so good for Germany, though, where the 15% tariffs could knock more than half a percentage point off growth this year, compared to what was expected earlier in the due to the size of its automotive sector - unhelpful for an economy that may be teetering on the brink of recession. Meanwhile, India became the top source of smartphones sold in the US in the last few months, after fears of what may lie in store for China prompted Apple to shift the other hand, India will be mindful that the likes of Vietnam and the Philippines – which face lower tariffs when selling to the US – may become relatively more attractive suppliers in other the board, however, there's relief that the blow, at least, is likely to be less extensive than might have been. But what has been decided already points to longer-term ramifications for global trading patterns and alliances the element of jeopardy introduced into a long-established major relationship with the US, lent added momentum to the UK's pursuit of closer ties with the EU – and getting a trade deal with India over the many countries, this has served as a wake up call - a need to remain alive to fresh alliances. A very real political threat for Trump? As details are nailed down, the implications for the US economy become clearer in the late spring there actually benefitted from a flurry of export sales, as businesses rushed to beat any higher tariffs imposed on American goods. Economists expect that growth to lose momentum over the rest of the year. Tariffs that have increased from an average of 2% at the beginning of the year to around 17% now have had a notable impact on US government revenue – one of the stated goals of Trump's trade policy. Import duties have brought in more than $100bn so far this year - about 5% of US federal revenue, compared to around 2% in past years. Treasury Secretary Scott Bessent said he expected tariff revenue this year to total about $300bn. By comparison, federal income taxes bring in around $2.5tn a shoppers remain in the front line, and have yet to see higher prices passed on in full. But as consumer goods giants such as Unilever and Adidas start to put numbers on the cost increases involved, some sticker shock, price rises, loom – potentially enough to delay Trump's desired rate cut – and possibly a dent to consumer spending. Forecasts are always uncertain, of course, but this represents a very real political threat for a president who promised to lower consumer prices, not take actions that would raise and other White House officials have floated the idea of providing rebate checks to lower-income Americans – the kinds of blue-collar voters who have fuelled the president's political success – that would offset some of the pocketbook an effort could be unwieldy, and it would require congressional also a tacit acknowledgment that simply boasting of new federal revenue to offset current spending and tax cuts, and holding out the prospect of future domestic job and wealth creation is politically perilous for a Republican party that will have to face voters in next year's midterm state and congressional midterm elections. The deals yet to be hammered out Complicating all this is the fact that there are many countries where a deal is yet to be hammered out – most notably Canada and Taiwan. The US administration has yet to pronounce its decisions for the pharmaceuticals and steel industry. The colossal issue of China, subject to a different deadline, remains agreed to a negotiating extension with Mexico, another major US trading partner, on Thursday of the deals that have been struck have been verbal, as yet unsigned. Moreover it is uncertain if and how the strings attached to Trump's agreements – more money to be spent purchasing American energy or invested in America – will actually be delivered some cases, foreign leaders have denied the existence of provisions touted by the president. When it comes to assessing tariff agreements between the White House and various countries, says Mr May, the "devil is in the detail" – and the details are clear, however, that the world has shifted back from the brink of a ruinous trade war. Now, as nations grapple with a new set of trade barriers, Trump aims to call the history tells us that his overarching aim - to return production and jobs to America – may meet with very limited success. And America's long-time trading partners, like Canada and the EU, could start looking to form economic and political connections that bypass what they no longer view as a reliable economic may be benefitting from the leverage afforded by America's unique position at the centre of a global trading order that it spent more than half a century establishing. If the current tariffs trigger a foundational realignment, however, the results may not ultimately break in favour of the questions will be answered over years, not weeks or months. In the meantime, Trump's own voters may still have to pick up the tab – through higher prices, less choice and slower reporting: Michael Race. Top image credit: Getty Images BBC InDepth is the home on the website and app for the best analysis, with fresh perspectives that challenge assumptions and deep reporting on the biggest issues of the day. And we showcase thought-provoking content from across BBC Sounds and iPlayer too. You can send us your feedback on the InDepth section by clicking on the button below.
