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July 28, 2025 – 10:13

(Bloomberg) — European stocks and US equity futures climbed after the European Union reached a trade deal with President Donald Trump, further easing fears of a damaging trade war.

The Stoxx 600 index gained 0.7% after the US-EU deal, which imposes 15% tariffs on most of the bloc’s exports. The record rally in US stocks looks set to extend, with S&P 500 contracts up 0.3% after the index closed at an all-time high Friday. The euro fell against the dollar, as strength in the greenback outweighed the boost from the trade deal.

Markets, rebounding from April lows, are drawing comfort from the latest trade deal and signs the US and China will extend their truce. That optimism faces a test this week with key data, Federal Reserve and Bank of Japan meetings and earnings from megacap companies, which may shape the outlook for markets and the global economy.

Trade deals are coming in “less worse than expected,” Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management, said on Bloomberg TV. “That change in expectation and sentiment pushed up the markets over the past few weeks, and going forward, we do need to see the fundamentals come back to play.”

Trump and European Commission President Ursula von der Leyen announced the EU deal on Sunday at his golf club in Turnberry, Scotland, although they didn’t disclose the full details of the pact or release any written materials.

The hard-fought deal will see the bloc face 15% tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy. Shares in automakers led early gains in Europe on Monday.

Meanwhile, shares in Hong Kong and China advanced after the South China Morning Post reported the US and China are expected to extend their tariff truce by another three months. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to meet in Stockholm on Monday.

Later in the week, the Bank of Japan is set to keep interest rates unchanged with traders on alert for any signs of future guidance by the central bank.

This week will also bring a US jobs report, while Magnificent Seven members Apple Inc., Amazon.com Inc., Microsoft Corp. and Meta Platforms Inc. are all due to report numbers. Robust corporate earnings have bolstered investor confidence in US stocks, as companies head for their highest share of beats since the second quarter of 2021.

Progress in trade deals, positive economic data and corporate resilience have offset worries that stocks are overheating. More than 80% of S&P 500 companies have exceeded profit estimates, according to data compiled by Bloomberg Intelligence.

In geopolitical news, leaders of Thailand and Cambodia are set for talks Monday to halt the deadliest clashes between the neighbors in more than a decade.

Corporate News:

  • Samsung Electronics Co. will produce semiconductors for Tesla Inc. in a new $16.5 billion pact that gives a boost for its underperforming foundry division.
  • Heineken NV saw a decline in beer volumes, as retailer disputes across Europe dragged on sales and limited its ability to take advantage of the summer heat wave.
  • McDonald’s Corp. is marketing eight of its retail properties in Hong Kong valued at HK$1.2 billion ($153 million).

Some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 rose 0.7% as of 9:12 a.m. London time
  • S&P 500 futures rose 0.3%
  • Nasdaq 100 futures rose 0.5%
  • Futures on the Dow Jones Industrial Average rose 0.2%
  • The MSCI Asia Pacific Index fell 0.3%
  • The MSCI Emerging Markets Index was little changed

Currencies

  • The Bloomberg Dollar Spot Index rose 0.4%
  • The euro fell 0.6% to $1.1677
  • The Japanese yen fell 0.4% to 148.27 per dollar
  • The offshore yuan fell 0.1% to 7.1760 per dollar
  • The British pound fell 0.2% to $1.3414

Cryptocurrencies

  • Bitcoin rose 0.1% to $118,933.55
  • Ether rose 1.7% to $3,889.55

Bonds

  • The yield on 10-year Treasuries declined two basis points to 4.37%
  • Germany’s 10-year yield declined three basis points to 2.69%
  • Britain’s 10-year yield declined three basis points to 4.61%

Commodities

  • Brent crude rose 0.4% to $68.72 a barrel
  • Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation. 

–With assistance from Joanne Wong and April Ma.

©2025 Bloomberg L.P.