📅 Wednesday, July 23
► European stocks jump as US-Japan deal raises hopes for EU accord
Markets in Europe surged after the US announced a long-awaited trade deal with Japan, setting the stage for similar agreements with the EU ahead of the Aug. 1 deadline. The Stoxx 600 rose +1.1%, led by strong gains in automakers and industrials. Germany’s DAX climbed +0.7%, France’s CAC 40 +1.35%, UK's FTSE 100 +0.6% and Italy’s FTSE MIB +1.7%. Investors cheered hopes that Brussels may soon finalize its own agreement, avoiding punishing 30% tariffs on exports. Bond yields across the Eurozone edged higher, while EUR/USD slipped (- 0.2%) to 1.173. Weakness in SAP despite a strong quarter weight on the DAX. UniCredit surged more than 4% post earnings. European sentiment has turned more bullish, supported by easing trade war fears and hopes for a positive earnings momentum.
► Wall Street rises post US-JP trade deal & as Alphabet & Tesla earnings take spotlight
US equity futures pointed to further strength with the S&P 500 up 0.4%, Dow +0.5%, and Nasdaq +0.2%, as traders digest the Japan trade deal and await earnings from Alphabet and Tesla due after the bell. Tuesday marked the 11th record close of 2025 for the S&P 500. The White House confirmed meetings with EU negotiators are ongoing, signaling more potential headline wins for Trump ahead of the August deadline. Meanwhile, earnings remain solid: over 85% of S&P 500 firms reporting so far have beaten expectations.
► Asia rallies hard on Japan deal; Nikkei soars most since 2021
Asian markets posted major gains, led by Japan’s Nikkei, which surged +3.51% after the US-Japan trade pact was confirmed. The rally was especially strong in auto stocks, with Toyota posting its best day since 1987 (+14.34%). South Korea’s Kospi +0.44%, Hong Kong’s Hang Seng +1.62%, and Australia’s ASX 200 +0.69% also advanced. However, Shenzhen dipped -0.37%, and Taiwan edged higher by +1.44%. Markets in the region are buoyed by relief that Asia's largest exporters may escape steep US tariffs. The US has also reached trade deals with Indonesia and the Philippines. Japanese government bonds sold off on weak demand at a 40-year note auction, lifting the 10-year JGB yield to its highest level since 2008. Sentiment in the region remained risk-on thanks to the easing of political pressure in Japan and the improved clarity (=less uncertainty!) regarding trade dynamics.
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