NEW YORK — July 28, 2025 —
U.S. markets treaded cautiously today following news that the United States has agreed to impose a 15% tariff on cars and other imports from the European Union—lower than the more severe rates previously proposed by President Donald Trump. While the move avoids a deeper trade clash, uncertainty over the full terms of the agreement and a packed week of economic flashpoints have left investors in a holding pattern.
The S&P 500 slipped 0.2% by afternoon trading, pulling back slightly from a record-breaking streak last week. The Dow Jones Industrial Average dipped 0.3%, or 142 points, while the Nasdaq inched up 0.2%, continuing its strong performance.
Markets were buoyed in part by tech optimism. Tesla rose 3.4% after CEO Elon Musk announced a multibillion-dollar chip deal with Samsung Electronics, potentially worth more than $16.5 billion. Samsung shares surged 6.8% in South Korea on the news. Other chipmakers followed suit, with AMD up 4% and Super Micro Computer jumping 8.6% amid continued enthusiasm around AI investments. Alphabet’s announcement last week to spend $85 billion this year on AI infrastructure has continued to ripple through the sector.
However, gains were tempered by an 8% drop in Revvity stock, after the diagnostics company delivered strong quarterly profits but issued a lackluster full-year outlook that disappointed analysts.
Investor sentiment remains cautious ahead of a pivotal week. Roughly one-third of S&P 500 companies—including tech giants Apple, Amazon, Meta, and Microsoft—are set to report quarterly earnings, putting further pressure on markets that have already priced in aggressive growth expectations.
The Federal Reserve is also in focus. The central bank will announce its latest interest rate decision on Wednesday. President Trump has publicly pressured the Fed to cut rates to bolster the economy, but Chair Jerome Powell has signaled a wait-and-see approach, citing a need for more data on inflation and the economic impact of tariffs.
Most economists anticipate the Fed will hold steady until at least September. Inflation concerns remain fresh following last year’s spike, which briefly pushed U.S. inflation above 9%. The Fed has already cut rates several times since late 2024, and the current pause reflects uncertainty about future policy direction.
A slew of key economic indicators are also due this week. Tuesday will bring updates on consumer confidence and job openings. Wednesday’s report on second-quarter GDP growth is expected to show a slowdown from earlier in the year. Thursday’s inflation report—closely watched by the Fed—could influence future rate moves. And on Friday, employment numbers for June will offer insights into labor market strength.
In the bond market, Treasury yields held mostly steady. The 10-year yield ticked up to 4.41%, while the 2-year yield—closely tied to Fed expectations—rose slightly to 3.92%.
Overseas, European markets slipped following the trade announcement, while Chinese stocks climbed ahead of U.S.-China trade talks scheduled in Sweden. Hong Kong’s Hang Seng index rose 0.7%, and Shanghai’s composite gained 0.1%. In contrast, Japan’s Nikkei 225 slid 1.1%, marking one of the region’s larger losses.