Global markets head into the final days of July with a sense of cautious optimism. The August 1 tariff deadline is just days away, but tensions have cooled. Over the weekend, the United States finalised a trade framework with the European Union, following a similar deal with Japan earlier in the week. Both agreements impose a flat 15% tariff rate on goods, down from the 30% previously threatened. In exchange, the EU pledged $750 billion in energy purchases and investments into the US economy.
More about: US and EU Reach Trade Deal After Month of Tense Talks
With trade tail-risks easing, attention now shifts to a tightly packed week of market-moving events. Central banks take center stage as the Federal Reserve and the Bank of Japan both meet. At the same time, US-China negotiations resume in Stockholm, where both sides are widely expected to extend their tariff truce by 90 days. All of this unfolds as Apple, Amazon, and Microsoft prepare to report earnings.
What Happened Last Week: Diplomacy, Volatility, and Record Highs
Equity markets closed last week with a five-day winning streak and fresh all-time highs for the S&P 500 and Nasdaq, driven by a rare mix of global diplomacy, retail speculation, and solid (if uneven) earnings.
Early in the week, meme-stock volatility returned with names like Opendoor and Kohl’s rising sharply on retail buzz before giving up gains. (Meme Stock Trap is BACK: Why Retail Traders Are Falling for Same Trap in 2025). By midweek, headlines shifted to the US-Japan trade deal, which settled tariff policy at 15% and unlocked more than half a trillion dollars in planned Japanese investment into US infrastructure and defense. This helped ease global tensions and sent all 11 S&P sectors into positive territory on Wednesday.
Earnings were mixed:
- Tesla disappointed with its worst revenue drop in a decade and warned of “rough quarters ahead”
- Google/Alphabet beat on ads, cloud, and search, driving optimism for tech resilience
- Intel beat revenue estimates and guided strong for Q3 despite posting a quarterly loss
- Deckers Brands soared 11% on strong Hoka performance
By Friday, sentiment was steady but cautious. Investors largely ignored Trump’s floating of a stimulus check funded by tariff revenue, and instead turned to the coming week’s economic calendar.
This Morning: Stocks Rise, Euro Steady, Bitcoin Slips
Global markets opened Monday on firmer footing as news of the US-EU trade deal filtered through. The euro strengthened across major pairs, oil prices firmed, and equity futures pointed to continued strength. Traders welcomed the policy clarity ahead of this week’s pivotal central bank meetings.
Sentiment in equities remains positive, but crypto markets edged lower. Bitcoin traded below $118,000 following a short-lived rally last week, but is now slightly up regarding general sentiment. Gold also fell, reflecting reduced demand for safe havens. Meanwhile, copper rose on optimism that trade de-escalation may support global industrial activity.
Global Snapshot: Market Mood
| Index / Asset | Movement | Notes |
|---|---|---|
| S&P 500 Futures | ▲ 0.5% | Set to open higher after EU trade deal |
| Nasdaq Futures | ▲ 0.6% | Gains on tech optimism and trade clarity |
| Euro Stoxx 50 Futures | ▲ 1.0% | Up on relief from tariff fears |
| MSCI Asia ex-Japan | ▲ 0.32% | Near 4-year high, positive sentiment |
| Nikkei 225 | ▼ 1.0% | Profit-taking after strong run |
| Euro | ▲ 0.4% | Strengthened vs USD after EU deal |
| Brent Crude | ▲ 0.5% | Gains amid improving risk appetite |
| Gold | ▼ 0.6% | Lower on reduced safe-haven demand |
| Copper | ▲ 0.3% | Up on trade optimism and demand expectations |
| Bitcoin | ▲ 0.8% | Slightly up $119K after rally; eyes Fed tone and global liquidity |
What’s Driving Markets This Week
Several key narratives are shaping investor positioning going into August:
- US-EU Trade Agreement
The 15% flat tariff rate marks a compromise between Trump’s aggressive posture and Europe’s push for zero-for-zero trade. With retaliation off the table and energy investment pledged, markets interpret this as a sign of restored predictability. - US-China Talks in Stockholm
Officials from both sides meet today, with reports suggesting a 90-day extension of the existing truce is likely. While no major breakthrough is expected, the absence of new tariffs offers breathing room for global markets. - Federal Reserve and BOJ Decisions
Both central banks are expected to hold rates steady. However, the Fed faces political pressure from Trump for cuts, while the BOJ may lean hawkish after the Japan-US trade pact removed policy constraints. - Big Tech Earnings
Apple, Microsoft, and Amazon report this week. With market cap concentration high, any disappointment could break the recent momentum. Investors are looking beyond the quarter and focusing on guidance, especially around AI infrastructure, consumer demand, and cloud margins.
More about: What to Watch This Week: Fed, Big Tech Earnings, Jobs Report and Euphoria Fears
Final Thoughts
Markets enter the week with fewer immediate threats and more clarity — but plenty of open questions. The latest wave of trade diplomacy has calmed nerves, but whether the rally can hold will depend on what central banks say and how earnings land. With inflation pressures shifting and global growth expectations in flux, investors are likely to remain nimble.
If the Fed sounds cautious, if China talks stall, or if Big Tech falters — sentiment could turn sharply. For now, the week begins with optimism. How it ends will be decided by data, diplomacy, and delivery.
