The S&P 500 closed nearly unchanged on Monday at 6,389.77 points, up just 0.02%, as American investors largely ignored the newly announced trade deal between the Trump administration and the European Union. Instead, they shifted their attention to a busy week filled with key market catalysts.
According to CNBC, the index hit a new all-time high shortly after opening but remained flat afterward, climbing only 0.2% above the baseline. The Dow Jones Industrial Average dipped 64.36 points to 44,837.56, while the Nasdaq Composite edged up 0.33% to a new record of 21,178.58.
Source: TradingView
š Market Indifference to Trump-EU Trade Deal
President Donald Trump revealed a new U.S.āEU trade agreement on Sunday, reducing tariffs to 15% for countries that sign bilateral deals with the U.S.āaimed at avoiding previous threats of 30% import duties. Trump warned Monday that countries not renegotiating could face tariffs between 15% and 20%, establishing a new global baseline.
Despite the announcement, market reactions were muted. Investors showed little enthusiasm, instead focusing on upcoming macroeconomic data, the Federal Reserveās policy decision, and tech earnings reports.
š Key Events This Week: Fed, Tech Earnings, and Jobs Data
This week is set to be one of the most active earnings periods of the quarter, with over 150 S&P 500 companies scheduled to report results. Notable tech giants include Meta and Microsoft on Wednesday, followed by Amazon and Apple on Thursday.
Market participants are paying close attention to AI-related investments and looking for signs that spending on cloud and infrastructure is paying off. Meanwhile, the Federal Reserveās two-day meeting began Tuesday, with a decision expected Wednesday. Most analysts expect interest rates to remain steady at 4.25%ā4.5%.
Fridayās U.S. jobs report is also pivotal, with forecasts of 102,000 new jobs added in Julyādown from 147,000 in June. This figure is seen as a key indicator of economic health, especially as wage growth and labor participation appear to stabilize.
š European Markets React Negatively as Euro and Stocks Drop
While U.S. markets stayed cautious, European assets responded more negatively. The euro fell over 1% against the dollarāits sharpest one-day decline since Mayāand declined 0.8% versus the British pound. Despite this, the euro remains up 12% year-over-year, buoyed by strong German defense spending and optimism that Trumpās āAmerica Firstā policies will prompt Europe to strengthen its own economy.
European leaders expressed discontent. German Chancellor Friedrich Merz warned that the new tariffs would cause āsignificant damageā to Germany, Europe, and even the U.S.:
āNot only will inflation rise, but transatlantic trade as a whole will suffer,ā Merz said. āThis outcome is regrettableābut itās the best possible under the circumstances.ā
French Prime Minister FranƧois Bayrou called the agreement a āblack day for Europe,ā claiming the EU had āsurrendered.ā European markets, which initially opened higher on hopes of a more favorable deal, reversed course:
š¹ Germanyās DAX closed down 1.1%
š¹ Franceās CAC 40 fell 0.4%
š¹ Stoxx Europe 600 auto sector, heavily exposed to tariffs, dropped 1.8%, erasing early gains
Source: TradingView
š Oppenheimer Turns Optimistic on S&P 500
Oppenheimer has reasserted a bullish outlook on the S&P 500, raising its 2025 year-end target to 7,100 points from a previous forecast of 5,950āa potential 11.1% rise from last weekās close.
Chief strategist John Stoltzfus explained that the April downgrade was linked to Trumpās proposed reciprocal tariffs, which are now on hold. The firm believes markets can withstand the current trade environment and continue to grow.
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