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Gold prices edged down in early trading on Wednesday, pulling back modestly from recent peaks as investor demand for safe-haven assets weakened following the announcement of a trade agreement between the United States and Japan.

By 05:05 ET (09:05 GMT), spot gold slipped 0.1% to $3,429.01 per ounce, while gold futures also dipped 0.1% to $3,440.60 per ounce.

Trade Pact Reduces Demand for Safety Plays

The precious metal lost some ground after U.S. President Donald Trump confirmed a trade agreement with Japan, easing investor concerns and encouraging a move toward riskier assets. The deal imposes a 15% tariff on Japanese imports—a figure notably less severe than the 25% tariff Trump had previously threatened. Automotive exports from Japan, in particular, saw lighter duties, which contributed to improved sentiment.

Japanese equity markets responded positively, with key indexes rallying to their highest levels in a year. This upswing in risk appetite helped drag down demand for traditional safe-haven assets like gold.

Still, the metal’s decline was contained, as the White House indicated that Trump’s 50% tariffs on steel and aluminum would remain in place.

Political concerns in Japan also tempered some of the optimism. Speculation continues to mount over the future of Prime Minister Shigeru Ishiba, with many analysts predicting his resignation following his party’s significant loss in upper house elections.

Despite Wednesday’s pullback, gold remains firmly in positive territory for the week, holding on to gains of over 2% and hovering just below its record high of $3,500/oz, last reached in April. So far this year, gold prices are up approximately 30%, fueled by global trade tensions, geopolitical instability, and continued buying by central banks.

Other Precious Metals Inch Higher

Silver and platinum have also seen upward momentum this week, both trading between 1% and 3% higher. On Wednesday, the two metals posted modest additional gains, continuing their recent positive trends.

Copper Struggles for Direction Amid Tariff Questions

In the industrial metals segment, London Metal Exchange copper futures slipped 0.1% to $9,911.15 per ton, while COMEX copper futures rose 1% to $5.7768 per pound.

While the U.S.-Japan trade accord marked a step forward in American trade diplomacy, concerns linger over mounting tensions with the European Union. Brussels is reportedly preparing countermeasures after Washington pushed for higher tariff rates than EU negotiators were willing to accept.

Meanwhile, Chinese trade data added further complexity to the copper market outlook. According to ING, Chinese imports of refined copper jumped 15% in June compared to May. At the same time, imports of U.S. copper scrap dropped to their lowest level in 21 years, falling below 2,000 tonnes—a dramatic decline from 14,023 tonnes in May and well under the 2024 monthly average of 36,600 tonnes, based on Chinese customs figures.

This drop comes ahead of a 50% tariff on copper scrap imports from the U.S., which is set to take effect in two weeks. China has traditionally been the primary buyer of U.S. copper scrap, making the trade flow highly significant for both economies.

“Questions remain about the details of the upcoming copper tariffs. There are still no details on whether the duties would apply to all copper products or whether there will be any exemptions. For example, aluminium scrap is excluded from the latest tariffs,” said ING in a recent note.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

U.S. stock index futures suggest a higher open on Wednesday, with major benchmarks poised to gain ground following a mixed close in the prior session.

Investor sentiment received a boost after President Donald Trump revealed new trade agreements with Japan and the Philippines.

The U.S.-Japan pact, described by Trump as the “largest ever” trade deal between the two countries, includes a 15% tariff on Japanese exports. It also outlines a $550 billion investment commitment from Tokyo in the U.S. and greater access for American products like vehicles, rice, and other agricultural goods.

“The U.S. would receive 90 percent of profits from the agreement,” Trump stated, adding that the deal “could generate hundreds of thousands of American jobs.”

Regarding the Philippines, Trump said the new pact would transform the country into an open market with zero tariffs on U.S. goods, though “Manila [would be] paying a 19 percent duty.”

The announcement has fueled speculation that more trade agreements could be finalized ahead of the August 1 deadline.

On Tuesday, stocks opened lower but gradually recovered throughout the session. Although the day ended with mixed results, all three major indexes rebounded from their intraday lows.

The Nasdaq dropped 81.49 points, or 0.4%, to 20,892.69, while the S&P 500 edged up 4.02 points, or 0.1%, to 6,309.62. The Dow Jones Industrial Average rose 179.37 points, or 0.4%, to 44,502.44.

The early weakness was largely attributed to profit-taking, as both the Nasdaq and S&P 500 had hit record highs the day before. Disappointment with certain earnings reports also weighed on the broader market.

General Motors (NYSE:GM) fell 8.1% despite reporting second-quarter earnings that beat expectations, as the results marked a sharp year-over-year decline.

Lockheed Martin (NYSE:LMT) slumped 10.8% following weaker-than-expected revenue for the second quarter.

Trading volume was relatively muted, as the absence of significant economic data led some investors to adopt a wait-and-see approach.

Market participants were also anticipating earnings reports from Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), both scheduled for release after Wednesday’s close.

Housing stocks stood out with strong gains, lifting the Philadelphia Housing Sector Index by 6.7%—its highest close in more than five months. D.R. Horton (NYSE:DHI) led the charge, surging 17% after posting better-than-expected fiscal Q3 results.

Gold stocks also performed well, with the NYSE Arca Gold Bugs Index climbing 3.1% to notch its strongest finish in over twelve years.

Additional strength was seen in oil services, biotech, and steel shares. On the downside, semiconductor, networking, and computer hardware stocks lagged the broader market.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

European equity markets moved mostly higher on Wednesday, recovering from three days of losses, as investors reacted positively to signs of progress on international trade deals. Market sentiment improved following U.S. President Donald Trump’s announcement of agreements with Japan and the Philippines.

Expectations also grew for potential trade discussions between the European Union and the U.S., with Trump confirming that EU representatives were due in Washington.

“We have Europe coming in tomorrow, and the next day, we have some other ones coming in,” Trump said on Tuesday evening, without providing further details.

The French CAC 40 Index rose by 1.2%, the German DAX Index climbed 0.7%, and the U.K.’s FTSE 100 Index advanced 0.5%.

In corporate developments:

• Koninklijke KPN NV (EU:KPN) shares fell nearly 2% after releasing its Q2 and H1 2025 financial results.
• Randstad NV (EU:RAND) dropped 1.8% despite reporting second-quarter core profit in line with expectations.
• ASM International (EU:ASM) sank 8.5% as second-quarter bookings came in below analyst forecasts.
• Lonza Group AG (TG:LO3) surged 5% following a 23% increase in half-year core profit, topping market estimates.
• Roche Holding AG (EU:RBO) gained 1.4% after the company paused some shipments of its gene therapy Elevidys, which has sparked regulatory concerns.
• Stora Enso Oyj shares jumped almost 6% as the Finnish forestry company reported stronger-than-expected operating earnings in Q2, despite market volatility.
• Alstom (EU:ALO) rallied 4% after exceeding sales expectations in its fiscal first quarter.
• Thales (EU:HO) declined 2% after revealing that its H1 2025 order intake fell 4%, both on a reported and organic basis.
• Renault Group (EU:RNO) rose 3.7% on news that vehicle sales increased by 1.3% in the first half of the year.
• Informa (LSE:INF) jumped 5.7% after lifting its full-year revenue forecast. The company organizes global events and publishes academic materials.
• SAP (TG:SAP) fell 3%, even after reporting stronger sales and earnings for the quarter. The software giant reaffirmed its full-year targets, which some investors may have found underwhelming.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

U.K. equities advanced on Wednesday, buoyed by renewed global trade optimism after the announcement of a significant trade agreement between the United States and Japan. Broader European markets also rallied, while the British pound strengthened against the dollar.

London Stocks Climb, Sterling Strengthens

As of 11:34 GMT, the FTSE 100 was up 0.5%, supported by improved investor confidence and positive global cues. The British pound also gained ground, trading 0.07% higher at $1.35.

On the continent, Germany’s DAX index also rose by 0.5%, while France’s CAC 40 advanced nearly 1%, reflecting upbeat sentiment across European markets.

Trump Announces “Massive” Trade Deal with Japan

Market sentiment was lifted after U.S. President Donald Trump revealed that his administration had secured a major trade pact with Japan, which will involve a 15% tariff on Japanese goods. Trump added that Japan will invest $550 billion into the U.S. economy, from which the U.S. will “receive 90% of the Profits.”

The agreement marks a notable development in international trade relations and is being closely watched by global markets.

Fresnillo Falls After Silver Production Miss

Shares of Fresnillo (LSE:FRES) slipped 0.4% after the miner reported second-quarter silver output of 12.5 million ounces, falling short of analysts’ consensus of 13.1 million ounces.

Despite the miss in silver, stronger gold production from the company’s Herradura and San Julián mines helped boost overall performance. According to RBC Capital Markets, total silver-equivalent output actually came in 4% above expectations.

Breedon Warns on Earnings, Shares Sink

Construction materials group Breedon (LSE:BREE) revised its full-year earnings guidance downward following a softer-than-expected first half of 2025. The company now anticipates EBITDA at the lower end of its projected range, targeting £291.4 million.

The revised outlook sent Breedon’s stock tumbling more than 10% in Wednesday trading.

JD Wetherspoon Reports Steady Growth

Pub operator JD Wetherspoon (LSE:JDW) posted a 5.1% increase in like-for-like sales for the first 12 weeks of its fourth quarter, maintaining the pace of growth seen earlier this year.

For the year-to-date period, like-for-like sales were also up 5.1%, matching the previous quarter’s momentum when sales climbed 5.6% for the 13 weeks ending April 27.

Informa Lifts Revenue Outlook Despite Loss

Informa PLC (LSE:INF) delivered a strong revenue update for the first half of 2025, prompting the company to raise its full-year growth guidance even as it posted a statutory loss due to a non-cash impairment charge.

The academic publishing and events company saw revenue surge 20.1% to £2.04 billion, with underlying revenue growth of 7.8%. The upbeat outlook sent Informa’s shares soaring over 5% on the day.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

U.S. stock futures edged higher Wednesday, fueled by optimism surrounding a new trade deal between the United States and Japan. The White House hailed the agreement, which sets a lower tariff rate on Japanese imports than initially planned by President Donald Trump, as “massive.” Meanwhile, the corporate earnings season continues, spotlighting tech heavyweights Alphabet (NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), who are scheduled to report after market close. Shares of Texas Instruments (NASDAQ:TXN) slipped as their quarterly profit guidance failed to meet investor expectations.

Futures on the rise

By 03:38 ET, Dow futures climbed 137 points (0.3%), S&P 500 futures gained 17 points (0.3%), and Nasdaq 100 futures rose 26 points (0.1%). The previous day’s trading closed with mixed results as investors digested a batch of fresh earnings reports.

General Motors (NYSE:GM) shares dropped sharply after the automaker revealed a more than one-third decline in second-quarter profits, largely impacted by a $1 billion cost linked to Trump’s tariffs.

However, confidence in heavy investments in artificial intelligence helped support some major tech stocks. The true test of investor enthusiasm will come later in the session when Alphabet and Tesla announce their quarterly results.

Market watchers remain focused on the evolving trade landscape, especially with the August 1 deadline approaching for Trump’s elevated “reciprocal” tariffs.

Details of the U.S.-Japan trade deal

President Trump described the new arrangement with Japan as a “massive deal,” noting that the Asian country will now face a 15% tariff rate.

He also highlighted that Japan will invest $550 billion in the U.S., with the U.S. “receiving 90% of the Profits.”

“Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%,” Trump stated on social media.

This deal is among the most substantial of several preliminary trade agreements following Trump’s introduction of increased tariffs in April. It came after reports that Japan’s chief trade negotiator, Ryosei Akazawa, met with Trump at the White House on Tuesday.

While the 15% tariff is less than the 25% originally proposed, it contradicts Japan’s prior demand for a complete exemption from U.S. tariffs.

Analysts at Capital Economics commented, “The trade deal with the U.S. announced today removes a key downside risk to Japan’s economy. We estimate that the net effect of today’s announcement will be a reduction in the average tariff rate faced by Japanese exporters in the U.S. of around one percentage point.”

Alphabet and Tesla’s earnings under the spotlight

Against the backdrop of trade uncertainties, investors are gearing up for crucial earnings reports from Alphabet and Tesla. These two companies will be the first among the “Magnificent 7” tech giants to release results for the second quarter.

Analysts will particularly watch for updates from Alphabet on its AI initiatives, following recent commitments to invest heavily in the emerging technology. Investors are keen to see that these investments help shield Google’s core search and advertising business from new AI competitors.

“For Google, sentiment is very mixed, with bears worried about the secular outlook for search as AI chatbots capture share and regulatory [slash] legal pressures while bulls emphasize compelling secular tailwinds in many key markets and a relatively cheap valuation,” Vital Knowledge analysts wrote.

Tesla faces scrutiny amid mounting competition that has dented sales in its primary auto business. Deliveries have declined year-over-year, and further challenges loom after Trump signed a fiscal bill on July 4 that eliminated solar and electric vehicle tax credits.

Still, investors hope Tesla can generate new revenue streams through its robotics and autonomous driving ventures. According to Vital Knowledge, enthusiasm around these areas has kept Tesla’s stock price “beyond where it should trade based exclusively on auto fundamentals alone.” The company’s share price is down more than 12% so far this year.

Texas Instruments’ shares slip despite strong earnings

Texas Instruments posted stronger-than-expected Q2 results, driven by improved demand in its industrial segment. However, shares fell in after-hours trading as investors grew cautious about the outlook for its analog chip business.

Revenue rose 16% year-on-year to $4.45 billion, hitting the high end of guidance and beating analysts’ forecasts of $4.35 billion.

Earnings per share came in at $1.41, including a 2-cent benefit not accounted for in prior guidance.

Sequentially, revenue increased 9%, propelled by a “continued broad recovery” in industrial sales. Net income for the quarter reached $1.30 billion.

Looking ahead, Texas Instruments expects Q3 revenue between $4.45 billion and $4.80 billion, with EPS ranging from $1.36 to $1.60. Analysts had predicted $4.59 billion in revenue and $1.49 in EPS, per LSEG data cited by Reuters.

While not yet directly impacted by Trump’s tariffs, rising costs for chip manufacturing equipment have prompted some clients to curb spending. CEO Haviv Ilan noted during a post-earnings call that recovery in the automotive sector has been “shallow,” with tariffs and geopolitical tensions “disrupting and reshaping” supply chains globally.

Gold slips

Gold prices dipped slightly, retreating from strong gains earlier this week after the U.S.-Japan trade deal boosted risk appetite and diminished some of gold’s safe-haven appeal.

However, gold remains under $100 shy of its April record high as uncertainty over Trump’s tariff policy lingers.

Ahead of a highly anticipated Federal Reserve meeting, cautious trading supported gold prices even as the dollar pulled back from recent strength.

Spot gold fell 0.2% to $3,426.80 an ounce, while gold futures declined 0.1% to $3,440.70 by 03:38 ET.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

After slipping for three consecutive days, the U.S. dollar stabilized Wednesday but remains close to its lowest point in two weeks, supported by improved risk sentiment following the U.S.-Japan trade agreement.

At 04:10 ET (08:10 GMT), the Dollar Index—which measures the greenback against a basket of six currencies—held mostly steady at 97.110, just above its weakest mark since July 10.

Since President Donald Trump announced his “Liberation Day” tariffs on April 2, the index has fallen more than 6%, reflecting growing global trade tensions.

Dollar hovers near lows amid trade optimism

The recent U.S.-Japan trade deal has lifted hopes of avoiding a full-scale global trade war and fueled expectations for additional agreements before upcoming tariff deadlines.

In a Truth Social post, Trump noted, “a tariff rate of 15% was set on imports from Japan, down from the 25% rate that was expected to take effect from August 1,” and added, “the Asian nation will invest $550 billion in the United States.”

Following Trump’s sweeping tariff announcements in April, the dollar has been one of the biggest losers, especially after many duties were delayed or suspended while the administration pursued bilateral deals.

Market focus now shifts to upcoming U.S. housing figures ahead of next week’s Federal Reserve meeting.

“The U.S. focus will be on the June existing home sales release,” ING analysts said in a note. “Some are thinking that the housing sector will be the next shoe to drop in the U.S. slowdown.”

Euro dips slightly before ECB decision

In European markets, EUR/USD edged down 0.1% to 1.1745, dipping slightly but still near a four-year high reached earlier this month.

The euro has rallied over 13% this year as investors sought alternatives to U.S. assets.

The European Central Bank is widely expected to keep rates unchanged on Thursday after eight straight cuts, with the threat of renewed U.S. tariffs looming.

GBP/USD rose 0.2% to 1.3546, buoyed by the U.K.’s recent trade deal with the Trump administration.

Political turmoil weighs on yen

Meanwhile, USD/JPY gained 0.1% to 146.72, with the yen giving back earlier gains made after the U.S.-Japan trade deal amid rising political uncertainty in Japan.

Washington and Tokyo agreed on a broad trade pact including a 15% tariff on Japanese imports, down from the previously proposed 25%.

However, optimism faded after Japan’s Mainichi newspaper reported that Prime Minister Shigeru Ishiba intends to formally resign by the end of August.

This decision follows growing internal criticism after the ruling Liberal Democratic Party’s coalition suffered losses in recent upper house elections.

Elsewhere, AUD/USD climbed 0.5% to 0.6577 and USD/CNY eased 0.2% to 7.1629, as the trade deal sparked broader regional optimism.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

Oil prices climbed during Asian trading hours on Wednesday, boosted by optimism surrounding a fresh trade agreement between the U.S. and Japan, and further strengthened by data revealing a decline in U.S. crude oil stocks.

At 22:07 ET (02:07 GMT), September Brent crude futures advanced 0.4% to $68.84 per barrel, while West Texas Intermediate (WTI) futures edged up 0.3% to $65.50 per barrel.

After three consecutive sessions of declines amid tensions in U.S.-EU trade relations and growing concern over President Donald Trump’s looming tariff deadline on August 1, oil markets found renewed support.

Trade Deal with Japan Improves Global Growth Prospects

On Tuesday, President Trump revealed that Washington and Tokyo had reached a comprehensive trade deal featuring a 15% tariff on all imported Japanese products — down from an earlier proposed rate of 25%. The deal includes a significant $550 billion Japanese investment into the U.S. economy.

This agreement opens up Japanese markets to U.S. exports such as automobiles, agricultural products, and energy goods, fueling optimism about global trade and demand expansion.

It stands as the most consequential of several trade deals brokered by the White House ahead of the August 1 deadline, when increased tariffs on key trading partners were scheduled to come into effect.

Market participants interpreted the agreement as a positive driver for global economic activity, which usually supports stronger crude demand.

US Crude Inventories Fall After Previous Surge – API

Adding to the positive trade developments, the American Petroleum Institute (API) reported an unexpected reduction of 577,000 barrels in U.S. crude oil inventories for the week ending July 18, reversing a prior build of 19.1 million barrels the week before.

This drawdown suggests a potential recovery in fuel demand during the busy summer travel period.

Gasoline stocks dropped by 1.2 million barrels, whereas distillate inventories—which include diesel and heating oil—increased by roughly 3.48 million barrels.

“This will offer some relief to the middle distillate market, which has been looking increasingly tight,” ING analysts commented in a note.

Investors await official inventory figures from the U.S. Energy Information Administration (EIA), scheduled for release later on Wednesday, closely monitoring for confirmation.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

European equity markets rallied strongly on Wednesday, buoyed by renewed investor optimism following the announcement of a trade agreement between the United States and Japan, alongside an active earnings season across the region.

By 07:05 GMT, Germany’s DAX index had gained 0.8%, France’s CAC 40 climbed 1.3%, and the UK’s FTSE 100 increased 0.4%.

Trade deal between U.S. and Japan fuels confidence

Earlier in the day, U.S. President Donald Trump declared that his administration had secured a “massive deal” with Japan, imposing a 15% tariff on Japanese exports. Trump also highlighted that Japan would channel $550 billion in investments into the U.S., with “90% of the Profits” benefiting the American economy.

Although the 15% tariff is lower than the 25% initially proposed by Trump, it still counters Tokyo’s previous insistence on being exempt from U.S. tariffs. The new levy is expected to come into effect on August 1, coinciding with the rollout of Trump’s other tariffs targeting major global economies.

The announcement propelled Japan’s Nikkei index up over 3% to reach its highest point in a year. The positive sentiment has increased expectations that the U.S. and European Union might finalize a trade agreement before the looming August deadline, with EU representatives scheduled for further talks in Washington this week.

UniCredit boosts 2025 outlook amid earnings season

Across Europe, the quarterly earnings reporting season accelerated with several major companies releasing results.

Italy’s UniCredit (BIT:UCG) exceeded profit expectations for the quarter and raised its forecast for 2025, following its withdrawal of a takeover bid for Banco BPM (BIT:BAMI), Italy’s second-largest bank.

Renault (EU:RNO), the French automotive giant, recorded flat sales for the second quarter as a drop in van demand across Europe offset passenger car growth.

French defense and aerospace firm Thales (EU:HO) raised its sales growth forecast for 2025 after reporting increased first-half sales and profits, benefiting from rising military spending in Europe.

Norway’s energy company Equinor (TG:DNQ) reported a 13% year-on-year decline in second-quarter profit, weighed down by falling oil prices despite higher gas prices.

German software giant SAP (TG:SAP) posted a strong second quarter supported by cost reductions but refrained from raising its full-year guidance, disappointing some investors.

Meanwhile, investors in the U.S. are awaiting earnings later today from Tesla (NASDAQ:TSLA) and Alphabet (NASDAQ:GOOGL), parent company of Google, both key drivers of recent market gains fueled by AI optimism.

Eurozone consumer confidence awaited

Later in the session, market participants will focus on the release of June’s consumer confidence data for the eurozone, a key indicator ahead of the European Central Bank’s policy meeting on Thursday.

Analysts broadly expect the ECB to maintain its main deposit rate at 2%, following a 25-basis-point cut last month—the eighth reduction in a year.

Oil prices climb on trade deal and inventory drawdown

Oil futures rose on Wednesday, supported by optimism over the U.S.-Japan trade deal and a notable drop in U.S. crude stockpiles.

At 03:05 ET, Brent crude futures edged up 0.2% to $68.74 per barrel, while U.S. West Texas Intermediate crude rose 0.3% to $65.48 per barrel. Both benchmarks had fallen in the previous three sessions.

Investors view the trade agreement as a boost to global economic activity, which typically leads to higher oil demand.

Adding to the positive outlook, the American Petroleum Institute reported a surprise decrease of 577,000 barrels in U.S. crude inventories for the week ending July 18, reversing the previous week’s build of 19.1 million barrels.

This inventory decline points to a possible rebound in fuel consumption during the busy summer travel period.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.

European automotive stocks saw a notable rise on Wednesday, following a surge in their Asian counterparts, buoyed by news of a new trade agreement between the United States and Japan that raised hopes for a similar arrangement with the European Union.

Shares of Stellantis (BIT:STLAM), the maker of Jeep and listed in Milan, climbed alongside German giants Volkswagen (TG:VOW3), Mercedes-Benz (TG:MBG), BMW (TG:BMW), and Porsche (BIT:1PORS). Renault (EU:REN) also experienced gains, despite reporting flat sales volumes in the second quarter.

This upward momentum was fueled by sharp gains among Japanese automakers. Toyota Motor (NYSE:TM) led the charge with a 14% increase, while Honda Motor (NYSE:HMC) soared over 11%. Nissan (USOTC:NSANY) rose about 8%, and Mazda (TG:MZA) surged nearly 17%.

South Korean manufacturers also benefited, with Hyundai Motor (USOTC:HYMTF) climbing 7.5% and Kia Corp (USOTC:KIMTF) up 8.5%, amid speculation that Seoul could secure trade terms similar to those agreed upon with Japan.

These market moves followed President Donald Trump’s announcement that his administration had finalized a “massive deal” with Japan, which includes a 15% tariff. Notably, Japan’s critical auto sector—accounting for over 25% of its U.S. exports—will face this tariff rate.

Trump stated that Japan would invest $550 billion in the U.S., from which the country “will receive 90% of the Profits.”

“Japan will open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products, and other things. Japan will pay Reciprocal Tariffs to the United States of 15%,” Trump wrote in a social media post.

This agreement—among the most significant of several preliminary trade deals since Trump introduced higher tariffs in April—followed reports of Japan’s lead negotiator, Ryosei Akazawa, meeting with Trump at the White House on Tuesday.

Though the 15% tariff is less than the 25% initially proposed by Trump, it still contradicts Tokyo’s earlier insistence on exemption from all U.S. tariffs.

“The trade deal with the U.S. announced today removes a key downside risk to Japan’s economy,” Capital Economics analysts said in a client note. “We estimate that the net effect of today’s announcement will be a reduction in the average tariff rate faced by Japanese exporters in the US of around one percentage point.”

Looking beyond Japan, the progress of talks with other major U.S. trading partners, including the European Union and India, remains uncertain as the August 1 deadline for Trump’s elevated “reciprocal” tariffs approaches.

Nonetheless, “success in obtaining some agreement at this time hence should have a substantial effect in mitigating concerns about future uncertainty,” Jefferies analysts noted.

This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.