Market Report.
📈 Major trading partners of the United States, including South Korea, Japan, and the European Union, have reached a deal with the nation. 15% tariffs will apply to all of them when their products are imported into the United States.
🇺🇸 Trump’s aggressive trade policy may be starting to yield positive results. The U.S. economy grew at a much stronger-than-expected pace of 3% in the second quarter, powered by a turnaround in the trade balance and renewed consumer strength. Consumer spending rose 1.4% in the second quarter, better than the 0.5% in the prior period. Exports declined 1.8%, but imports fell 30.3%, reversing a 37.9% surge in Q1. The personal consumption expenditures price index, the Federal Reserve’s key inflation metric, showed a gain of 2.1% for the quarter, just above the central bank’s 2% target. The strong GDP growth was achieved without help from government spending, as federal outlays declined 3.7%, coming off a 4.6% drop in the first quarter.
🏡 Residential investment fell 4.6% in Q2, reflecting the impact of high mortgage rates, which Trump has been complaining about.
🤝 U.S. President Donald Trump announced a “Full and Complete” trade deal with South Korea, setting a 15% tariff on the country’s exports to the U.S., down from the previously threatened 25%. The deal also cuts tariffs on South Korean auto exports to the U.S. from 25% to 15%. Trump said South Korea will invest $350 billion in the U.S., to be owned and controlled by the U.S. and selected by the President. However, there are differences in interpretation between Seoul and Washington on how this investment will be utilized.
🇰🇷 South Korea’s President Lee Jae-myung said the $350 billion will facilitate Korean companies’ entry into the U.S. market in industries like shipbuilding, semiconductors, and biotechnology. U.S. Commerce Secretary Howard Lutnick said 90% of the profits from the $350 billion investment will go to the American people. The deal also includes South Korea’s commitment to purchase $100 billion in LNG or other energy products from the U.S.
🇮🇳 New U.S. tariffs on India, announced by President Donald Trump, involve a 25% duty on Indian goods starting August 1, 2025, plus an additional, unspecified “penalty” related to India’s continued purchases of Russian oil and military equipment. He also singled out India’s membership in BRICS, which he called “an anti-United States” grouping, and accused it of “undermining the US dollar”.
🇧🇷 President Donald Trump has imposed a new 50% tariff on most Brazilian goods exported to the United States, effective August 6, 2025. However, there are significant exemptions: key sectors such as aircraft, energy products, and orange juice are not subject to the higher tariff. The tariffs are framed as a response to what the Trump administration characterizes as “politically motivated” legal actions and censorship by the Brazilian government, specifically referencing the prosecution of former President Jair Bolsonaro.
🇨🇳 China responds to Trump’s threats about sanctions on countries that buy Russian oil. Chinese officials, including those at the Foreign Ministry, continue to assert their “energy sovereignty,” signaling that energy procurement decisions will be based on national interests, not U.S. threats. The messaging remains that China will “defend its energy sovereignty” and that external pressure “will not achieve anything”. China remains Russia’s largest fossil fuel buyer, accounting for about 38% of Russian fossil fuel exports by value in June 2025.
🇪🇺 The European Union has admitted it does not have the power to deliver on its promise to invest $600 billion in the U.S. economy, as the funds would come entirely from private sector investment over which Brussels has no authority. The pledge to invest an extra $600 billion was made by European Commission President Ursula von der Leyen during trade talks with U.S. President Donald Trump in Scotland. Two senior European Commission officials clarified that the $600 billion would come exclusively from private European companies, with no public investment contribution from the EU.
💶 The Commission has not said it will introduce any incentives to ensure the private sector meets the $600 billion target, nor given a precise timeframe for the investment. The $600 billion figure was based on discussions with business associations and companies about their investment intentions, but the idea that the private sector can be relied upon to provide this level of investment was met with skepticism. The EU’s $600 billion promise played a key role in facilitating the trade agreement with the U.S. Unlike Japan’s recent trade deal with the U.S., the figure would come from private companies.
📊 In Q2 2025, Meta reported earnings that beat analyst expectations on both revenue and earnings per share. Meta’s advertising revenue came in at $46.56 billion, exceeding Wall Street projections. The company provided Q3 2025 revenue guidance in the range of $47.5 billion to $50.5 billion, ahead of analyst estimates. CEO Mark Zuckerberg outlined his vision for “personal superintelligence” using the company’s AI investments and advancements.
💴 The Japanese yen rose 0.6% in the hours following the Bank of Japan’s decision to maintain its accommodative rate policy, a move consistent with prior market expectations. Attention is now shifting toward the central bank’s upwardly revised inflation projections, with Governor Kazuo Ueda scheduled to deliver remarks in the near term. The adjustment signals a re-evaluation of the policy outlook, and traders speculate that rate hikes may return to the central bank’s policy calculus this year.
Market Review:
🕊 The Federal Reserve left interest rates unchanged, as expected. However, Wall Street seems buoyed by Meta’s strong results and the fact that the US economy’s figures are once again positive, with GDP growth exceeding expectations in the second quarter (Q2) of 2025.
📈 The S&P 500 futures are nearing all-time highs, reaching approximately 6,460 points and currently trading at 6,455 points. The Nasdaq 100 futures are also surging to record highs, approaching 23,800 points and trading just 5 points below this level.
💵 The US dollar has surged, nearly reaching 100 points on the DXY index, before retreating in the last few hours to the current level of 99.60 points. This has weakened currency pairs like EUR/USD, which has fallen by over 3% from its highs since Monday, dropping close to 1.14 before rebounding slightly to the current level of 1.1445.
🛢 The crude oil market has resumed its upward movement, with China and Russia rejecting US threats of sanctions on Russian crude and its buyers. Brent crude approached $72.90 per barrel before retreating to its current level of $72.25.
🥇 Gold futures, which saw a rally earlier in the week, have declined towards $3,320 per ounce before rebounding to the current level of $3,350 per ounce.
💻 Bitcoin remains undecided; yesterday, it even dropped below $116,000 but has since recovered to around $118,350 today. It is likely to continue its upward trajectory, given the movements in the US equity markets.
