Global Stocks Dip as US-EU Trade Deal Rattles Markets
US-EU Trade Deal Impact on Global Markets: Stocks Drop, Euro Slides
US-EU trade deal impact on global markets was felt sharply on Monday as global equities dipped, the euro weakened, and U.S. Treasury yields climbed. Investors reacted cautiously to the newly announced trade pact between the United States and the European Union at the start of a high-stakes week in global finance.
The agreement, which imposes a 15% import tariff on most EU goods, comes alongside EU plans to invest $600 billion in the U.S. and open parts of its market. While European Commission President Ursula von der Leyen called the deal the best possible, several EU capitals criticized it as too favorable to Washington.
MSCI’s global stock index fell 0.30% to 938.48, pulling back after a streak of record highs. On Wall Street, the S&P 500 and Nasdaq barely managed fresh records. The S&P 500 inched up 0.02% to 6,389.77, and the Nasdaq rose 0.33% to 21,178.58, while the Dow fell 0.14%.
European indices closed lower, with the STOXX 600 down 0.22% and the FTSEurofirst 300 slipping 0.15%. The deal follows recent U.S. trade pacts with Japan, Indonesia, and the Philippines, all ahead of President Trump’s August 1 trade deadline.
Elsewhere, U.S. and Chinese officials held over five hours of trade talks in Stockholm, trying to extend their current truce.
In currency markets, the dollar strengthened. The euro fell 1.27% to $1.1591, and the dollar gained 0.62% against the yen to 148.57. The dollar index rose 1.07% to 98.65.
Bond yields also rose. The U.S. 10-year Treasury yield climbed to 4.414%, and the 30-year yield reached 4.9616%. Investors are eyeing the upcoming Federal Reserve meeting, although no rate changes are expected this week.
Oil prices surged over 2%, driven by the trade pact and Trump’s ultimatum to Russia. U.S. crude rose to $66.71, and Brent closed at $70.04 per barrel.
Gold fell to a near three-week low as the stronger dollar and improved risk appetite weighed on the metal. Spot gold dropped to $3,317.31 an ounce.
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