Focus on Tech Earnings Boosts Anticipation for European Stock Market Growth
In the ever-evolving world of finance, the global markets are currently navigating a complex web of economic indicators, with technology stocks showing signs of potential growth following solid quarterly results from Meta Platforms and Microsoft. However, other sectors are not faring as well, with the Dow shedding 0.4% overnight and the S&P 500 sliding 0.1%.
The U.S. dollar is holding steady near a two-month high, a surge attributed to the strong U.S. economic data. The U.S. economy rebounded robustly in the second quarter of 2025, growing an annualized 3%, a significant bounce back from the 0.5% contraction in the first quarter.
Meanwhile, oil prices have slightly dipped after three days of gains, while gold prices have rebounded from a one-month low.
In the realm of trade, the new U.S. tariffs on European imports, set at 15% as of July 2025, are expected to have a significant impact on the U.S. economy. According to a Yale Budget Lab analysis, these tariffs could lead to an overall price increase of about 1.8% in the short run, resulting in income losses for U.S. households and higher consumer prices, particularly in sectors like clothing and textiles.
However, this tariff increase comes alongside a major U.S.-EU trade deal. The EU has committed to removing many tariffs on U.S. industrial goods and investing significantly in the U.S. economy, including $600 billion in investment and $750 billion in U.S. energy imports through 2028. These elements may offset some negative tariff impacts by fostering broader economic cooperation and market access between the U.S. and Europe, potentially stabilizing or supporting European stocks and global markets.
European stocks ended on a flat note on Wednesday, but are expected to open higher on Thursday. Flash inflation and unemployment data from Germany will be released today, which could provide further insights into the European economic landscape.
Elsewhere, Asian markets were mostly lower today due to weaker-than-expected Chinese July activity data and a lack of stimulus signals from China's top leadership. The tech-heavy Nasdaq Composite rose 0.2% overnight, while the German DAX edged up by 0.2% on Wednesday.
In other news, U.S. President Trump announced a 25 percent tariff on all goods imported from India. The full implications of this decision remain to be seen.
Today, several major companies, including Apple, Amazon, Mastercard, Shell, Unilever, and British American Tobacco, will unveil their earnings results. These reports will provide valuable insights into the health of these corporations and the broader economy.
Sources:
- Yale Budget Lab analysis on U.S. tariffs effects, July 28, 2025 ([1])
- White House Fact Sheet on U.S.-EU Trade Deal, July 28, 2025 ([2])
The fluctuating technology stocks, driven by solid quarterly results from Meta Platforms and Microsoft, indicate a promising business environment in the realm of technology. Meanwhile, European stocks are anticipated to open higher, potentially influenced by the upcoming flash inflation and unemployment data from Germany.
