It felt like a summer lull yesterday, but markets were anything but relaxed. After the U.S. and European Union struck a compromise on their trade deal, equity markets reacted with muted enthusiasm. Classic “buy the rumor, sell the news” behavior: after a strong open, European stocks slipped, with the Stoxx Europe 600 ending down 0.22%, trimming its 2025 gains to 8.1%. Earlier this year, Europe had outperformed the U.S. by more than 10%, but now the S&P 500 has pulled ahead at +8.6%. The U.S. benchmark even managed its sixth straight gain (+0.02%) and briefly broke through 6,400 points for the first time ever.

The lackluster reaction doesn’t mean the deal is insignificant. It’s vague, but it removes the worst-case scenario that investors feared and, if anything, keeps risk appetite intact. Sentiment has swung dramatically in recent weeks: from “Trump’s reckless policies will tank the economy” to “Trump will make others pay while the U.S. economy remains resilient.” The truth lies somewhere in between—especially on who ultimately bears the cost of tariffs—but markets tend to favor leaders who look decisive and project strength.

For Europe, the agreement—though not finalized—feels like damage control. The Kiel Institute estimates the new 15% tariffs on select EU goods will shave just 0.13% off Germany’s GDP and 0.01% off France’s. Those numbers sound small, but the impact will be uneven, hitting some industries much harder than others.

Despite yesterday’s mild pullback, relief is still the dominant theme. But don’t expect the calm to last. The real action starts tomorrow when the Fed delivers its latest rate decision, a key moment for markets. On top of that, earnings season hits full speed. This week alone, Microsoft, Meta, Apple, and Amazon headline a roster of 57 companies worth $100 billion or more reporting results, according to FactSet. Add the Bank of Japan’s policy meeting, European GDP prints, plus U.S. inflation and jobs data, and you have a packed calendar.

In commodities and FX, the dollar jumped on the trade deal news, oil climbed back toward $70 a barrel after Trump issued a fresh ultimatum to Putin to end the war in Ukraine within 10 to 12 days—an empty threat so far. Tensions keep oil markets tight as Russia remains a key supplier. Gold, meanwhile, has been sliding since last Wednesday as geopolitical risk eases.

Asia-Pacific markets traded lower overnight: Japan, Hong Kong, and Taiwan all fell 1%, India dipped 0.2%, and Australia closed flat. South Korea bucked the trend with a 0.6% gain ahead of trade talks with U.S. Treasury officials later this week. European futures point slightly higher this morning as earnings flow accelerates.

Today's economic highlights:

On the agenda today: in the United States, wholesale inventories, the FHFA house price index, the Conference Board's consumer confidence index and JOLTS job openings. See the full agenda here.

  • USD/GBP: 0.7503 GBP
  • Bund/OAT spread: 66 points (-1.5%)
  • VIX: 15.03 (+0.1%)
  • Gold: $3,321
  • Brent: $69.72
  • 10-year US: 4.404%
  • Bitcoin: $118,908

In corporate news:

  • Airline Sector – Groups representing major U.S. airlines, travel agencies, and airports urged the Senate on Monday to reject a bill that would limit the Transportation Security Administration’s ability to use facial recognition software at security checkpoints.
    • Airlines for America, which represents American Airlines, United Airlines, Delta Air Lines, Southwest Airlines, and others, along with U.S. Travel and two airport groups, opposed the bill in a letter seen by Reuters, warning it could “significantly increase wait times by slowing identity verification at every airport security checkpoint.
  • JetBlue and United Airlines received approval from the U.S. Department of Transportation for their partnership plan, allowing them to move forward. JetBlue also reported a smaller-than-expected adjusted loss for the second quarter thanks to cost-cutting measures and a rebound in U.S. travel demand. The stock is up 3% premarket.
  • Boeing and Sweden’s Saab are in talks with Britain’s BAE Systems about teaming up to eventually replace the Hawk training jet, targeting a fast-growing segment in the advanced jet trainer market, sources said. Boeing also reported a smaller quarterly loss, supported by higher aircraft production and deliveries after regulatory issues and a major strike disrupted operations last year. Shares rose 1.5% premarket.
  • Eli Lilly said its drug Jaypirca outperformed AbbVie’s Imbruvica in a head-to-head study on patients with a type of blood cancer.
  • PayPal raised its annual profit forecast above Wall Street estimates as its efforts to grow high-margin businesses such as Venmo and U.S. checkout began to pay off.
  • UnitedHealth reinstated its annual profit outlook, withdrawn more than two months ago, but the new forecast came in below already-lowered analyst expectations as government-backed health plans faced rising costs.
  • Spotify gave third-quarter profit guidance below analyst estimates as higher wage-related taxes outweighed solid demand for premium streaming subscriptions. Shares fell 9% premarket.
  • Merck & Co announced job cuts and cost reductions targeting $3 billion in annual savings after reporting weaker second-quarter results, citing low demand for its Gardasil vaccine in China.
  • United Parcel Service reported a drop in profit and revenue in Q2 as demand was hurt by new U.S. “de minimis” tariffs on low-value Chinese shipments and growing trade policy risks.
  • Royal Caribbean raised its annual profit outlook, betting on resilient demand for premium cruises and private island destinations.
  • Nvidia placed an order for 300,000 H20 chips from contract manufacturer TSMC last week, driven by strong Chinese demand. Enfabrica, a Silicon Valley startup backed by Nvidia, launched a new chip and software system aimed at reducing memory chip costs in AI data centers.
  • Citigroup announced an expansion of its research coverage to include private companies, focusing on fast-growing tech firms, following a similar move by JPMorgan.
  • Uber avoided a 20% profit margin tax for ride-hailing operators outside London after the UK Supreme Court ruled private-hire operators do not contract directly with passengers.
  • Sarepta Therapeutics said it will resume supplying its gene therapy for a muscle disease to ambulatory patients, sending its shares up 59% after-hours.
  • Baker Hughes announced it will acquire Chart Industries for $13.6 billion, including debt, outbidding Flowserve to expand in LNG, data centers, and decarbonization.
  • Universal Health Services beat Q2 earnings estimates, supported by steady demand for medical care services.
  • Nucor reported lower second-quarter profit as higher raw material costs weighed on its steel operations, with shares down 3.8% after-hours.
  • Veralto raised full-year profit guidance and beat quarterly estimates, driven by strong demand for industrial water treatment services.
  • Harley-Davidson is in talks with Pacific Investment Management Co and KKR to sell a stake in its financing division and existing motorcycle loan portfolio in a $5 billion deal, Bloomberg reported.
  • Bristol Myers Squibb and Bain Capital will create an independent company focused on immunology drug development, backed by $300 million from Bain.
  • The Hartford posted a 35% increase in second-quarter profit on strong insurance expense performance and higher investment income.
  • Waste Management beat Q2 earnings and revenue estimates, supported by higher prices and steady waste collection demand.
  • Alphabet’s self-driving unit Waymo announced plans to launch its autonomous ride-hailing service in Dallas in 2026, accelerating U.S. expansion as Tesla pushes its new robotaxi initiative.
  • Cadence Design agreed to plead guilty and pay over $140 million to settle U.S. charges for selling chip design products to a Chinese military university suspected of nuclear explosion simulations.
  • Procter & Gamble CEO Jon Moeller will step down after four years in the role, with COO Shailesh Jejurikar set to succeed him. The company also issued full-year guidance well below Wall Street estimates amid cautious consumer spending.
  • Union Pacific will acquire Norfolk Southern for $85 billion, creating the first freight rail operator connecting both U.S. coasts. Norfolk Southern also posted higher Q2 profit thanks to improved volumes.
  • Berkshire Hathaway sold about one-third of its stake in Verisign, an internet infrastructure and domain registration company it had held since 2012, Verisign said.
  • BetMGM, the U.S. sports betting service jointly owned by Entain and MGM Resorts, raised its full-year revenue and profit forecasts after posting a 35% revenue increase in the first half, driven by strong online sports betting and iGaming demand.

Analyst Recommendations:

  • Airbnb : Deutsche Bank maintains its hold recommendation and raises the target price from 112 to USD 125.
  • Ameriprise Financial : Argus Research Company maintains its buy recommendation and raises the target price from USD 550 to USD 568.
  • Amphenol : Vertical Research Partners maintains its hold recommendation with a price target raised from 83 to USD 110.
  • Blackstone : Rothschild & Co Redburn maintains a neutral recommendation with a price target raised from 144 to USD 168.
  • Cadence Design Systems : Griffin Securities maintains its buy recommendation and raises the target price from USD 320 to USD 374.
  • Draftkings : BMO Capital Markets maintains its outperform rating and raises the target price from USD 64 to USD 65.
  • Exelixis : Lucid Capital Markets LLC maintains a neutral recommendation with a price target reduced from USD 37 to USD 36.
  • Gentex : JP Morgan maintains its neutral recommendation and raises the target price from 26 to USD 30.
  • Globe Life : Autonomous Research maintains its outperform recommendation and raises the target price from USD 149 to USD 165.
  • Mgm Resorts International : Susquehanna maintains a positive recommendation with a price target raised from 50 to USD 60.
  • Ovintiv : Goldman Sachs maintains its buy recommendation and raises the target price from USD 51 to USD 55.
  • Rambus : Rosenblatt Securities Inc. maintains its buy recommendation and raises the target price from 80 to USD 90.
  • Rithm Capital : Jones maintains its buy recommendation and raises the target price from USD 12.50 to USD 13.50.
  • Roblox : Deutsche Bank maintains its buy recommendation and raises the target price from USD 82 to USD 130.
  • Synchrony Financial : Autonomous Research maintains its neutral recommendation and raises the target price from USD 72 to USD 74.
  • Universal Health Services : Barclays maintains its overweight recommendation and raises the target price from 257 to USD 259.
  • Wayfair : Deutsche Bank maintains its hold recommendation with a price target raised from 25 to USD 60.
  • Woodward : Deutsche Bank maintains its buy recommendation and raises the target price from USD 320 to USD 335.