Mid-Day Buzz
July 28th, 2025
Stocks Edge Higher on U.S.-EU Trade Deal, S&P 500 Eyes Another Record
Equity markets are modestly higher this morning, with the S&P 500 on track for its 15th record high of the year. Over the weekend, the U.S. and European Union finalized a trade agreement that imposes a 15% tariff on most EU imports, easing investor concerns ahead of the August 1 trade deadline. With reports of a deal emerging late last week, much of the optimism appears to be priced in.
Last week the S&P 500 index set record highs all five days and gain nearly 1.5% amid easing trade war worries.
Economic Takeaways:
- The U.S. dollar is strengthening sharply against the euro. After sliding earlier this year, the dollar is regaining ground as trade uncertainty diminishes.
- Treasury yields remain steady as investors await this week’s Federal Reserve meeting.
- Trade tensions, which drove a near-20% market pullback in April, are beginning to ease. The weekend’s U.S.-EU deal slashed proposed tariffs from 30% to 15%, and includes a commitment by Europe to purchase $750 billion in U.S. energy and invest an additional $600 billion domestically.
- Car tariffs are set at 15%, steel and aluminum will remain at 50%, and decisions on pharmaceuticals and semiconductors are still pending.
- The U.S. and China are expected to extend their tariff truce by 90 days during meetings today in Sweden.
- Fed Chair Powell is likely to stick with a cautious, data-driven approach. If trade clarity continues post–August 1 and inflation remains in check, a rate cut as early as September is possible, with more guidance likely at the Jackson Hole summit in late August. Markets are currently pricing in one to two cuts by year-end, with a slow path to a neutral rate near 3%–3.5% into 2026.
- On the macro front, Friday’s June durable goods report showed core business investment dipping 0.7% after a 2% gain in May—suggesting some cooling. The Atlanta Fed’s GDPNow tool held its Q2 GDP forecast steady at 2.4%, ahead of the government’s official release Thursday.
- So far, 83% of S&P 500 companies reporting have topped earnings estimates, with tech and communication services leading the charge in year-over-year growth.
Dollar Surges on US-EU Trade Pact as Markets Watch China Talks Unfold
The dollar posted its biggest gain since May on Monday after a newly announced tariff agreement between President Donald Trump and the European Union lifted investor sentiment and raised hopes for an extension of the U.S.-China trade truce. Stocks hovered near all-time highs while bond yields edged slightly lower.
The greenback extended its July rally, with the euro falling the most in more than two months. The S&P 500 traded around 6,400, though market breadth was weak. Oil prices also rose following comments from Trump suggesting he may expedite a resolution to the Russia-Ukraine conflict. Treasury yields held steady after two government debt auctions.
“This is about as busy as a week can get in the markets,” said Chris Larkin at E*Trade from Morgan Stanley. “This week could make or break that momentum in the near term.”
With the August 1 U.S. tariff deadline approaching, markets are bracing for a packed schedule that includes job market data, inflation readings, GDP figures, and key earnings reports from major tech companies representing over $11 trillion in combined market cap.
U.S. and Chinese officials began two days of trade talks Monday, aiming to extend their existing truce ahead of a mid-August deadline. At the same time, Canadian Prime Minister Mark Carney noted that his administration remains in deep discussions with the U.S. over trade.
“It is possible that as more trade deals are announced, the level of uncertainty that has hovered over business and the economy will ease,” said Brent Schutte at Northwestern Mutual Wealth Management Co. “Additionally, the impact of final trade deals could be less than originally forecast after the April 2 announcement of reciprocal tariffs.”
“Whether we agree or not with the use of tariffs and the deals announced, we are getting the big ones out of the way which will allow American businesses to adjust and plan, for better or worse,” said Peter Boockvar at the Boock Report. “And we can now focus on how this all plays out.”
On the Move
- Tesla (TSLA) rose another 1.6% in early trading Monday, extending Friday’s rebound after a steep sell-off earlier last week. The stock got a boost from news of a $16.5 billion semiconductor deal with Samsung over the weekend. Tesla could also benefit from the U.S.-EU trade deal, thanks to its manufacturing presence in Germany.
- Nike (NKE) jumped 4.2% premarket after JPMorgan upgraded the stock to Overweight from Neutral—the firm’s first price target hike on Nike in over a year. JPMorgan sees a multi-year recovery ahead for the athletic giant.
- Lockheed Martin (LMT) climbed over 1% ahead of the open, as the EU committed to increasing purchases of U.S. defense products. Other trade-sensitive names also moved higher, including Cleveland-Cliffs (CLF), Boeing (BA), ASML (ASML), Kratos Defense (KTOS), Exxon Mobil (XOM), Cheniere Energy (LNG), and Deere (DE). Notably, Cheniere rose 4% on expectations of increased EU demand for U.S. LNG, oil, and nuclear fuels to replace Russian energy supplies.
- Intel (INTC) edged higher after Friday’s sell-off, which was triggered by lukewarm guidance and a continued focus on restrained capital expenditures. Meanwhile, Palantir (PLTR) and Super Micro Computer (SMCI) posted modest early gains, following Friday’s strength tied to AI momentum and Alphabet’s (GOOGL) increased capital spending plans. This week, investors will be closely watching earnings from tech heavyweights Microsoft, Amazon, and Meta.
- Meme stock volatility showed signs of cooling. Kohl’s (KSS), which dropped over 6% Friday, ticked up slightly this morning. Other recent meme names like Krispy Kreme (DNUT) and 1-800 Flowers (FLWS) saw minimal movement, though investors should stay alert if the retail-driven frenzy reignites.
- Bitcoin (/BTC) advanced 1.7%, nearing record highs. Crypto-linked stocks, including MicroStrategy (MSTR) and Coinbase (COIN), rose in tandem, supported by renewed economic optimism from the trade agreement.
What’s Ahead
Nearly 40% of S&P 500 companies are set to report earnings, including major names like Microsoft, Meta, Apple, and Amazon later this week.
Key earnings from PayPal (PYPL), Royal Caribbean (RCL), Merck (MRK), and Procter & Gamble (PG) are due tomorrow. All have rallied recently, so “sell the news” behavior is something to watch post-report.
Second-quarter GDP and the July jobs report are due, along with the Fed’s interest rate decision on Wednesday.
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