Trump Delays Tariffs on EU, US Stock Futures Rise, Bitcoin Recovers, Market Gets Temporary Breather
However, trade uncertainty and NVIDIA’s earnings report remain key to the market outlook.
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U.S. President Trump has postponed the planned imposition of a 50% tariff on EU imports to July 9, providing a brief respite for the tense U.S.-EU trade relationship. According to Fortune, upon this news, U.S. stock index futures rose and Bitcoin showed signs of recovery, reflecting market optimism over a possible easing of trade conflicts. Data from Forex.com indicates that the euro to U.S. dollar exchange rate also climbed above 1.1380. However, whether this delay can dispel the cloud of trade uncertainty looming over the global economy remains uncertain. Market attention has also turned to the upcoming earnings report from tech giant NVIDIA this week.
Trade Negotiations Show Signs of Improvement, Tariff Threat Temporarily Averted
The Trump administration had previously proposed and then suspended a 20% “reciprocal tariff” against the EU back in April. The sudden threat of a 50% tariff took EU officials by surprise. Trump stated on his social media platform Truth Social that negotiations with the EU were “at a standstill” and blamed the EU’s value-added tax, fines on U.S. companies, and regulations. European Commission President Ursula von der Leyen responded on platform X:
“The EU is ready to move negotiations forward quickly and decisively. We need time until July 9 to reach a good agreement.”
Trump’s decision on Sunday returned negotiations to a state prior to the threats, giving both sides over a month to seek consensus. Although U.S. stock futures rose due to the tariff delay, gold prices stalled after failing to reach $3,367 per ounce, indicating that investors remain cautious about the potential impacts of trade tensions.
Uncertainty Persists, Tech Earnings in Focus
Despite the breathing room provided by the tariff delay, trade policy uncertainty (TPU) continues to be a concern for the market. According to research from CEPR, an increase in the TPU index typically exerts negative pressure on the stock market and may dampen business investment and profit expectations. The ongoing risks of a trade war could further trigger widespread economic disruptions. As noted by the European Central Bank, trade tensions have exacerbated volatility in U.S. and European stock markets. Meanwhile, the market is highly focused on NVIDIA’s earnings report and guidance set to be released early Thursday morning, with Fortune asserting that this is crucial for the field of artificial intelligence and the overall market.
U.S. corporate earnings in the first quarter showed strong performance, with Goldman Sachs analyzing a 12% growth in profits exceeding expectations. However, BOK Financial warned that the impact of tariffs on future profits remains unclear, as they may drive up prices and affect consumer demand. Additionally, S&P Global Market Intelligence pointed out that while the tech sector is resilient, the industry’s heavy reliance on international supply chains still faces uncertainties.
Overall, Trump’s delay in imposing tariffs on the EU brings temporary solace to the market, alleviating concerns over an escalation of the trade war, but this is merely a stopgap measure. The shadow of trade protectionism has not dissipated and continues to bring volatility to the market. In the coming weeks, the market will closely monitor the progress of U.S.-EU trade negotiations and the earnings performance of tech giants like NVIDIA.
