It’s been a broadly positive week for markets, between continued tariffs talks and a mixed earnings season.
Here’s our Head of Investments, Andrew Prosser, to run through the biggest stories moving markets this week.
In summary
US–Japan trade deal.
President Trump’s threatened tariffs of 25% on Japan were cut to 15%. US auto tariffs on Japanese cars trimmed from 25% to 15%.
A massive $550 billion Japanese investment fund into the US was flagged and will open the two countries up to trade. The Nikkei 225 jumped up by 4% this week (USD terms).
Broader tariff optics
This deal with Japan boosts hopes other countries can strike agreements before the 1st of August deadline.
The EU has accelerated talks toward a 15% headline tariff, and Trump has hinted he won’t go below 15% on “reciprocal” rates.
Earnings season mixed
The latest earnings season was a mixed bag. Alphabet, Google’s parent company, reported better-than-expected revenue thanks to demand for its AI products, and the stock rose over 3%.
Tesla missed the mark and warned of tougher conditions after losing US electric vehicle incentives (–6%).
Europe remains strong
Deutsche Bank and BNP Paribas beat estimates; Europe remains the best-performing major market so far in 2025.
New highs… with a caveat
The US (S&P 500) and UK (FTSE 100) indices hit all-time highs in local currency terms. For UK investors, however, the S&P 500 is not at a sterling all-time high.
This is because the dollar is down 8% against the pound so far this year, so the S&P 500 is up 9% in USD, but only 1% in GBP.
FX impact
For sterling investors, dollar weakness trimmed most of this week’s equity gains, leaving only a small positive.
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