European stocks closed lower on Monday, and the euro slid, as markets digested a long-awaited EU-US trade agreement announced on Sunday.  

On the other side of the Atlantic, the S&P 500 and Nasdaq closed at record highs, again, at the beginning of a week jam-packed with big announcements. Keep reading to find out more.
 

EU-US Trade Agreement

On Sunday, European Commission President Ursula von der Leyen travelled to Scotland to meet US President Donald Trump. 

The two leaders struck a trade agreement which imposes a 15% tariff on most EU exports to the US. Whilst this includes cars, which had previously faced a tariff of 27.5%, it excludes steel and aluminium, which will continue to face duties of 50%. 

Some sectors, including aircraft parts, will avoid tariffs, but a list of duty-free products has yet to be finalised, with wines and spirits still being negotiated. 

Trump also said that the EU would increase investment in the US by $600 billion and spend $750 billion on energy.  

A number of European leaders have subsequently voiced displeasure with the agreement.

German Chancellor Friedrich Merz said it would “substantially damage” the German economy but conceded that the Brussels negotiating team "couldn’t expect to achieve any more”.

French Prime Minister Francois Bayrou said it was a “dark day” and likened the agreement to “submission”. 
 

The Market Reaction

On Monday morning, European stocks initially reacted positively to the news, as investors embraced clarity after months of uncertainty. However, the gains didn't last. 

At some point during the day, the market seemed to realise that although tariffs of 15% were preferable to the 30% being threatened, they are considerably higher than the average 4.8% levy which had been in force pre-Trump. 

The Germany 40 index, which had opened 0.86% higher on Monday morning, reversed course and closed the session down by 1.02%. Similarly, France’s CAC40 opened 1.15% higher but closed with a loss of 0.43%. 

The euro also slid, falling 1.35% against the US dollar and 0.78% against the British pound. However, the euro remains up 12% against the dollar year to date.

Across the Atlantic, Wall Street had a fairly muted session, but the S&P 500 and Nasdaq just about managed to close at record highs after gaining 0.02% and 0.33% respectively. Conversely, the Dow Jones settled down by 0.14%.

The session marked the sixth consecutive day of record closes for the benchmark S&P 500 index and its 15th record close of the year.

What to Look Out for This Week

It’s a busy week in terms of potentially market moving announcements, with a slew of important economic data and big corporate earnings reports due over the coming days.
 

Economic Announcements

On Wednesday, the Federal Reserve is widely expected to hold interest rates steady for a fifth consecutive meeting, despite President Trump ratcheting up pressure on the central bank.

Interest rate futures traded at the CME Group show a 97% likelihood that rates will remain unchanged, according to CME’s FedWatch tool.

Consequently, market participants will be more focused on subsequent comments from Fed Chair Jerome Powell for any indication as to where interest rates will be heading later in the year.

The following day, the Personal Consumption Expenditures Index - the Fed’s preferred measure of inflation – will be released, which will show what effect Trump’s tariffs have thus far had on prices. 

Other important events in the economic calendar this week include: 

• Wednesday, 29 July:  
  • Germany Gross Domestic Product (GDP) Q2 2025 
  • US GDP Q2 2025 
• Thursday, 30 July: 
  • Germany Consumer Price Index (CPI) July 2025 
• Friday, 1 August: 
  • Euro area CPI July 2025 
  • US Nonfarm Payrolls July 2025 
     

Earnings Watch

So far, 170 companies from the S&P 500 have released quarterly earnings, with 83% beating expectations. 

This week is set to be the busiest of earnings season, with more than 150 companies from the S&P 500 scheduled to report. 

Amongst these companies are four of the so-called Magnificent Seven, with Microsoft and Meta Platforms slated for Wednesday and Apple and Amazon for Thursday.

Other notable earnings announcements include:

• Tuesday, 29 July: 
  • Visa 
  • Procter & Gamble 
  • UnitedHealth 
  • Boeing 
• Wednesday 30 July: 
  • Arm Holdings 
• Thursday, 31 July: 
  • Mastercard 

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