Global Markets Rise - US-EU-Trade Agreement

Global Markets Rise Following US–EU Trade Agreement: Overnight Trading Summary for Monday, July 28, 2025

ST. LOUIS, MO (STL.News) Global Markets Rise – Global financial markets kicked off the final week of July with renewed optimism as investors reacted positively to a landmark trade agreement between the United States and the European Union. The overnight trading activity across Asia and Europe on Monday, July 28, 2025, showed signs of cautious optimism, despite underlying macroeconomic uncertainties and geopolitical tensions.

Global Markets Rise – U.S.–EU Trade Agreement Sparks Global Optimism

One of the most significant developments influencing market sentiment overnight was the announcement of a U.S.–EU trade agreement that reduces tariffs to 15% on most European exports to the United States. This development marks a notable easing of trade tensions that had escalated over the past year under the Trump administration’s protectionist stance. The agreement is expected to stabilize transatlantic trade relations and alleviate fears of a broader trade war.

The news buoyed investor confidence globally and contributed to broad gains in both European equity futures and U.S. index futures, signaling a potentially strong start to the U.S. trading session later today.

Global Markets Rise – Asia-Pacific Markets: Mixed But Resilient

Asian markets posted mixed results overnight as investors digested the news from Europe while responding to domestic developments. Japan’s Nikkei 225 declined approximately 1%, weighed down by political uncertainty following recent legislative setbacks for the ruling coalition. The drop reflected growing concerns over the future of economic reforms that have been central to Japan’s growth strategy.

In contrast, Hong Kong’s Hang Seng Index rose between 0.5% and 0.8%, recovering from last week’s losses. Investor sentiment was supported by signs of improving trade prospects and modest gains in tech and financial sectors. Meanwhile, mainland China’s CSI 300 registered marginal gains of about 0.1%–0.3%, despite reporting a decline in industrial profits, which underscored ongoing challenges in the Chinese economy.

The broader MSCI Asia-Pacific ex-Japan Index edged down slightly by 0.3%, reflecting overall investor caution amid a mix of encouraging and discouraging signals.

Global Markets Rise – Currency Markets: Dollar Rebounds, Yen Weakens

The foreign exchange markets mirrored the optimism surrounding the trade agreement. The U.S. Dollar Index (DXY) strengthened overnight, climbing back above the 106 level as traders priced in reduced trade risk and a stronger U.S. economic outlook. The euro initially spiked higher on the trade news but lost momentum, slipping approximately 0.3% against the dollar as European traders assessed the long-term implications of the deal.

The Japanese yen weakened amid local political uncertainty and a broader shift toward risk assets. Meanwhile, the Australian dollar held firm near an eight-month high of 0.656 to 0.657 USD, supported by strong export data and resilient commodity demand.

Global Markets Rise – Commodity Markets: Oil Edges Higher, Gold Slightly Down

Oil prices posted modest gains during the overnight session. Brent crude futures rose roughly 1.2%, trading near $69.00 per barrel, while WTI crude hovered around $65.50 per barrel. The uptick was driven by improved demand expectations stemming from the U.S.–EU trade deal, along with expectations of tighter inventories.

Conversely, gold prices drifted lower, falling to a two-week low amid improved risk sentiment. The precious metal traded slightly below $2,340 per ounce, as investors moved funds into equities and away from safe-haven assets. However, analysts warn that persistent inflationary pressures and upcoming central bank meetings could add renewed volatility to the metals market.

Global Markets Rise – European Markets: Strong Gains Across the Board

European equity markets opened on a positive note, with major indices gaining strength in the early trading session. The Stoxx Europe 600 rose by 0.7%, while Germany’s DAX and France’s CAC 40 climbed approximately 0.8% and 0.6%, respectively. The rally was largely attributed to the breakthrough in U.S.–EU trade negotiations.

U.K.’s FTSE 100 saw more muted gains of around 0.2%, constrained by weak domestic retail sales data and Britain’s exclusion from the newly signed trade agreement.

Sector-wise, European industrials, autos, and financials led the charge, as investors anticipated reduced trade barriers and better earnings outlooks for companies heavily reliant on exports to the U.S. market.

Global Markets Rise – U.S. Futures: A Positive Setup for Wall Street

Ahead of the U.S. market open, futures for major U.S. indices were trading higher. The S&P 500 futures gained 0.17%, while the Dow Jones Industrial Average futures advanced by 0.06%. Nasdaq futures led the way, climbing around 0.6%, reflecting optimism in the technology sector.

In the bond market, the 10-year U.S. Treasury yield ticked slightly higher to 4.41%, suggesting reduced demand for safe-haven assets in favor of riskier equities. Bitcoin, meanwhile, slipped by 0.3%, trading near $118,600, amid decreased appetite for speculative assets.

Global Markets Rise – Key Themes and Outlook

With the trade environment appearing more stable, investor attention is now shifting to several key themes:

Federal Reserve Meeting (July 29–30) – Markets are widely expecting the Fed to maintain current interest rates. However, the post-meeting press conference will be closely scrutinized for forward guidance on inflation, growth, and monetary policy outlook.
Corporate Earnings Season – Several U.S. tech giants, including Apple, Microsoft, Meta, and Amazon, are scheduled to report earnings this week. Their performance will be a key barometer for broader market momentum.
Macroeconomic Data – Investors are anticipating U.S. non-farm payrolls, consumer spending, and eurozone flash GDP and inflation data, all of which will help shape expectations for Q3 performance.

Conclusion of the Global Markets Rise

The overnight trading session on Monday, July 28, 2025, reflected cautious optimism across global markets. The U.S.–EU trade agreement provided a much-needed catalyst for equities, while easing fears of escalating protectionism. Although challenges such as political uncertainty in Japan, economic slowdowns in China, and central bank policy risks persist, the tone in global markets has clearly shifted toward a risk-on stance.

As Wall Street prepares to open, all eyes will be on earnings and central bank updates. For now, however, global investors appear encouraged by the prospect of smoother trade relations and better-than-expected economic resilience heading into the second half of 2025.

Stay tuned to STL.News for continued coverage of financial markets, economic policy, and global trade development – Global Markets Rise

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