The markets experienced a rally as trade negotiations between the U.S. and Japan, as well as the EU, progressed positively. The S&P 500 reached a new record high, closing at 6,358.91, with futures indicating further gains. Investors are regaining risk appetite after months of uncertainty stemming from President Trump’s tariffs. With proposed trade deals suggesting reduced tariffs, investors have responded with optimism. As major trading partners, the resolution of these deals is expected to foster a more favorable trading environment for risk assets.
The risk-on tone has continued over the last 24 hours, with the S&P 500 (+0.78%) at a fresh record thanks to growing optimism that more trade deals would be reached before August 1.
Markets digested the proposed trade deal with Japan (15% tariffs plus some other stuff) and this morning there are reports that the EU is closing on a deal (again, 15% tariffs plus some other stuff).
Markets rallied as the U.S. moved closer to trade deals with Japan and the EU, bringing much-certainty after months of President Trump's volatile tariff threats.
Japan and Europe are two of the U.S.'s largest trading partners and now that the markets have some certainty around trade, it's back to 'risk-on' for investors.
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