The S&P 500 index closed virtually flat on Monday at 6,389.77 points, marking a negligible gain of 0.02%, as American traders brushed aside the newly announced trade deal between the Trump administration and the European Union, shifting their focus to a week packed with more influential market catalysts.
According to CNBC, the index reached a new all-time high shortly after the opening bell but remained nearly unchanged thereafter, rising just 0.2% above the baseline. Meanwhile, the Dow Jones Industrial Average fell 64.36 points to 44,837.56, while the Nasdaq Composite gained 0.33% to close at a new record of 21,178.58.
📜 Trump-EU Trade Agreement Met With Market Apathy
President Donald Trump announced a new U.S.–EU trade deal on Sunday, lowering tariffs to 15% for countries that sign bilateral agreements with the U.S.—a move aimed at averting previously threatened 30% import duties. Trump warned on Monday that any country not renegotiating with the U.S. would likely face tariffs between 15% and 20%, calling this the new global baseline.
Despite the announcement, the market reaction was subdued. Traders showed little enthusiasm for the deal, instead keeping a close eye on upcoming macroeconomic data, the Federal Reserve's policy decision, and tech earnings.
📊 A Week Dominated by Fed, Tech Giants, and Jobs Report
This week is expected to be the busiest earnings stretch of the quarter, with over 150 companies in the S&P 500 set to report their results. Spotlighted tech giants include Meta and Microsoft on Wednesday, followed by Amazon and Apple on Thursday.
Investors are especially focused on AI-related spending and are watching for signs that capital deployed in cloud and infrastructure is paying off. Meanwhile, the Federal Reserve began its two-day meeting on Tuesday, with its announcement expected Wednesday. Markets largely anticipate the Fed will maintain interest rates at 4.25%–4.5%.
Also crucial is Friday’s U.S. jobs report, where analysts expect the creation of 102,000 new jobs in July—down from 147,000 in June. The number is considered a key indicator for the economy’s trajectory, especially amid signs that wage growth and labor force participation are stabilizing.
🌍 EU Reacts With Anger as Euro and Markets Fall
While U.S. traders remained cautious, the reaction in Europe was far more negative. The euro dropped over 1% against the U.S. dollar—its sharpest one-day fall since May—and lost 0.8% against the British pound.
Despite Monday’s drop, the euro is still up 12% year-on-year, fueled by investor confidence in German defense spending and bets that Trump’s “America First” policy will eventually force Europe to strengthen its own economy.
European leaders, however, were not pleased. German Chancellor Friedrich Merz said the new tariffs would cause “significant damage” to Germany, Europe, and even the U.S.:
“Not only will inflation rise, but transatlantic trade as a whole will suffer,” Merz said Monday. “This result is not satisfactory—but it was the best possible outcome under the circumstances.”
French Prime Minister François Bayrou was even more blunt, calling the agreement a “black day for Europe.” He said the EU had “surrendered itself.” European markets, which opened higher in hopes of a more favorable deal, reversed course.
🔹 Germany’s DAX closed down 1.1%
🔹 France’s CAC 40 fell 0.4%
🔹 Stoxx Europe 600 auto sector, which is highly exposed to tariffs, dropped 1.8%, erasing early gains
📈 Oppenheimer Turns Bullish Again on S&P 500
Investment bank Oppenheimer reinstated its bullish stance on the S&P 500, raising its year-end 2025 target to 7,100 points, up from a previously lowered forecast of 5,950. This reflects an 11.1% upside from last Friday’s close.
Chief strategist John Stoltzfus explained the downgrade in April was in response to Trump’s proposed reciprocal tariff plan, which is now suspended. The firm believes markets can absorb the current trade outlook and still rise.
#stockmarket , #S&P500 , #FederalReserve , #TRUMP , #Tariffs
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