By John Meyer, consultant in financial affairs – Eurasia Business News, July 28, 2025. Article no. 1657

Stocks were mixed on Monday after the US clinched a trade deal with the EU, and investor optimism grew over an eventual agreement with China.

The euro fell sharply after President Trump and European Commission President Ursula von der Leyen announced a new US-EU trade agreement late Sunday, triggering significant moves in both currency and equity markets.

The euro <EUR=> fell 1.27% to $1.1591. Against the Japanese yen <JPY=>, the dollar strengthened 0.62% to 148.57.

Key reasons for the euro’s drop:

  • The deal imposes a new 15% tariff on most European exports to the US (down from a threatened 30% but higher than the previous average), hitting major sectors like automobiles, pharmaceuticals, and semiconductors.
  • The EU committed to purchase $750 billion in US energy (oil, LNG, nuclear) and make an additional $600 billion in US investments over the coming years, along with expanded military equipment purchases.
  • Despite averting an even steeper tariff escalation, many analysts and European officials view the deal as disproportionately benefiting the US, fueling concerns about Europe’s growth prospects and trade competitiveness.

As a result, investors moved out of the euro toward the dollar, reflecting both ongoing uncertainty and a perception that the agreement strengthens the US economic position at the eurozone’s expense.

Stock market reaction

The Dow Jones Industrial Average slipped by 0.14%, as investors weighed relief from avoided escalation against the longer-term challenges for multinational businesses and European demand.

S&P 500 and Nasdaq both hit record closes, powered by resilience in US tech and broad-based optimism that a major trade conflict was avoided.

Further details

  • Certain sectors (such as aircraft, parts, and some chemicals) will be exempted from these tariffs, but full sector-by-sector details are pending disclosure in the coming days.
  • Tariffs on European steel and aluminum remain at 50% until a future quota system is negotiated, which continues to pressure those industries.
  • Voices from within the EU, including French and German officials, have criticized the deal as favoring American interests and called it a “capitulation” in some media.

The euro’s drop and the Dow’s pullback reflect skepticism about the long-term benefit of the deal for Europe, despite short-term relief from a trade war scenario. The agreement provides stability but leaves fundamental trade challenges and sector-specific impacts unresolved.

Gold futures opened at $3,321 per ounce Monday, only down 0.4% from Friday’s close of $3,334. Gold prices rallied to $3,370 during the Asian and European sessions and shot all the way up to the edge of $3,390 ahead of the North American open on Monday morning. By 11:00 a.m. EDT, spot gold had established a near-term top right at the $3,400-per-ounce resistance level. 

Silver price was at $38.18 per troy ounce, broadly unchanged 0.02% from the $38.17 it cost on Friday.

Read also : Gold : Build Your Wealth and Freedom

France denounced the trade agreement between the European Union and the U.S. as a “submission” on Monday though other EU states largely backed a deal they acknowledged was lopsided but which averts an economically damaging trade war with Washington.

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© Copyright 2025 – Eurasia Business News. Article no. 1657