President Donald Trump and European Commission President Ursula von der Leyen announced a trade deal between the U.S. and EU earlier in the week. The pact included investment and energy import conditions, in addition to tariffs. President Trump also announced tariffs on multiple countries including Canada, India, Brazil and South Korea. Additionally, the U.S. Federal Reserve (Fed) and BoJ kept their policy rates unchanged this week.

In global geopolitics, Russia claimed to have captured new Ukrainian territories. Polish Prime Minister Donald Tusk expects the Russia-Ukraine war to end shortly. Global pressure on Israel to resolve the Gaza crisis increased. The U.S. senate approved the continued supply of arms to Ukraine. Canadian Prime Minister Mark Carney expressed his disappointment on the higher tariffs imposed by the U.S. on Canadian goods. US Treasury Secretary Scott Bessent expressed the Trump administration’s ire on India and China for the purchase of Russian oil.

Global Updates
  • The MSCI All Country World Index declined this week. Tariff uncertainty and the Fed’s rate decision weighed on global markets. Tariffs were announced for 90 countries by President Trump. The white house, however, clarified that tariff exemptions for refined copper, pharmaceuticals, steel, automobile parts, and specialty metals would continue. 
  • The European Union and U.S. agreed to a trade deal over the weekend. The deal included unrestricted market access for U.S. exports, 15% tariffs on EU’s exports. The 50% levy on EU steel and aluminum will continue. The EU also committed to purchasing $750 billion in energy and investing $600 billion. German Chancellor Friedrich Merz and French President Emmanuel Macron have criticized the terms of the agreement.
  • President Trump announced a 50% tariff in Brazil. However, aircraft, energy and orange juice were excluded. Sanctions were also imposed on the judge overseeing former President Jair Bolsonaro’s trial. A 25% tariff was also imposed on India’s exports. 
  • President Trump announced a 15% tariff on South Korean exports. South Korea agreed to open market access for US exports, investing $350 billion and importing $100 billion in energy from the U.S. 
  • Novo Nordisk stock price dropped sharply after the company lowered its full year guidance for sales growth to 8% to 14%, due to a weak growth forecast for its weight loss drug Wegovy in the U.S. The company has named Maziar Mike Doustdar as its new CEO who is set to take over from August 7.
  • Rolls-Royce stock gained after the company raised its guidance for profit to 3.2 billion points and for cash flow to 3.1 billion pounds following a 51% jump in its H1 profit to 1.7 billion pounds due to significant improvements to its engines.
  • UK power company Drax Group posted an 11% lower adjusted profit of $611 million for the first half of 2025, due to lower prices. The group kept its full year guidance unchanged and raised its share buyback program by 450 million pounds.
  • Lufthansa posted a 27% jump in its higher-than-expected second quarter operating profit of $995 million despite global conflicts and economic volatility.
  • Shell posted a higher-than-expected second quarter adjusted earnings of $4.26 billion despite a 32% drop in profits annually due to lower oil prices and losses from operation outages. 
  • The Bank of Japan (BoJ) kept its policy rate steady at 0.5% but hinted at rate hikes later in the year. The BoJ also raised its inflation projections through fiscal 2027, including the underlying inflation in food prices. These announcements led to softening in the yen. 
  • Copper futures fell after President Trump announced a 50% tariff on semi-finished copper products including pipes and wiring. 
  • Oil futures registered weekly gains despite tariff uncertainty and rising OPEC+ production.
U.S. Equity
  • The S&P 500, Nasdaq and Dow Jones indices declined this week, interrupting the five weeks of consecutive gains and record highs. Tariff uncertainty and the fed’s hawkish stance weighed on the markets. President Trump announced tariffs on 90 countries and additional tariffs on copper.
  • The Trump administration has indicated that additional tariff decisions on lumber, copper and critical minerals will also be forthcoming in the coming weeks. Commerce Secretary Howard Lutnick has indicated that changes to the government’s semiconductor policies will also be announced. 
  • The Fed held its key policy rate steady citing the inflationary factors in the world and U.S. economy, despite political pressure from the Trump administration in recent weeks. Two board members of the Fed dissented from the rate decision. Fed Chair Jerome Powell indicated a continued hawkish stance by the Fed, supported by a resilient economy and stable inflation levels. Markets now estimate the likelihood of a rate cut in September at 50%. 
  • Advanced Micro Devices (AMD) stock gained after the company raised the price of its MI350 AI chip, which is a competitor for Nvidia. 
  • Microsoft stock price rose this week pushing valuation past the $4 trillion mark. The company posted higher than expected fourth fiscal quarter revenue of $76.44 billion and a net income of $27.23 billion. The strong revenue growth was driven by the 26% growth of its intelligent cloud division. Microsoft plans to raise its first fiscal quarter capital expenditure to $30 billion. 
  • Meta reported a 22% growth in its higher-than-estimated second quarter revenue of $47.52 billion and a net income of $18.34 billion. Meta’s 21% growth in advertising revenue to $46.56 billion was attributed to AI driven efficiency by its CEO. Meta has raised its planned capital expenditure for 2025 to $72 billion.
  • Mastercard posted a higher-than-expected adjusted EPS of $4.15 on revenue of $8.13 billion in the second quarter. 
  • Visa’s fiscal third quarter adjusted earnings of $5.83 billion beat estimates, on revenue of $10.17 billion. Visa plans to leverage AI and stablecoins in future products. 
  • Qualcomm’s stock price lagged despite reporting fiscal third-quarter revenue of $10.37 billion and a 20 % growth in its slightly higher-than-estimated adjusted EPS to $2.77. Investors were cautioned due to the lost revenue from Apple’s decision to manufacture modems in house. 
  • Exxon Mobil’s second quarter earnings of $7.1 billion beat estimates, driven by lower costs and increased production despite lower prices.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined slightly this week.
  • The U.S. 10-year Treasury yield edged down to 4.376% and the yield on the 2-year note rose to 3.949% over the week.
  • The U.S. Dollar Index rose to 99.98 this week, as the USD gained on the Euro and Yen.

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