Here's Why a Strong Euro Could Be Bad News for European Companies

Economic

Summary:

The euro’s sharp rise in 2025 is putting pressure on European corporate earnings. Second-quarter reports are expected to show weaker profits, while a stronger currency and softening demand weigh on sales and margins across key sectors.

The sharp strengthening of the euro seen so far in 2025 could begin to weigh on European corporate profits, with the impact likely to surface as the second-quarter earnings season gets underway.

According to a recent analysis by Bank of America, a firmer euro — alongside softening sales — may depress earnings for the STOXX 600 index, potentially marking the weakest performance in five quarters.

The euro-dollar exchange rate has risen by 9% over the last quarter, reaching a four-year high and marking the strongest quarterly performance since late 2022.

Meanwhile, the value of the euro against a basket of foreign currencies, tracked by the ECB, rose by 4.6% in the last quarter, reaching its highest level on record on 1 July.

As the second-quarter earnings season begins in Europe, the analyst consensus from Wall Street points to a 3% decline in earnings per share (EPS) compared to the same period last year.

That drop, underpinned by a 3% contraction in sales, reflects both faltering demand and adverse foreign exchange dynamics.

Energy and consumer discretionary sectors (industries that sell non-essential goods) are expected to be the biggest drags on index earnings, more than offsetting continued resilience from healthcare.

After two quarters of positive growth, earnings from cyclical sectors excluding financials are projected to return to contraction, with EPS forecasts cut by 2.5% in the past month alone.

“Q2 earnings growth for cyclicals (ex-financials) is expected to turn negative again after two quarters of positive growth,” said Andreas Bruckner, equity strategist at Bank of America.

“Positive euro area macro surprises imply solid EPS beats, but euro strength is a risk,” he added.

While financials had supported earnings in prior quarters, their contribution is expected to be muted this time. Eurozone macroeconomic surprises were slightly positive in the second quarter, typically a sign of decent earnings performance to come.

Analysts have already slashed European earnings forecasts for 2025, citing currency appreciation and increasing trade barriers as key risks.

Since early April, consensus EPS growth expectations for both 2025 and 2026 have been cut by around 5%, with 17 of 20 major sectors seeing downgrades — autos being the hardest hit.

Expectations for 2025 EPS growth have halved, from 6% to 3%, and the 12-month forward EPS for the STOXX 600 now sits 3% below its all-time high recorded in March.

Bank of America forecasts a 4% year-on-year decline in 2025 EPS, as global trade headwinds, tariff effects and slowing investment in the US weigh on European exporters and multinationals.

Three key earnings reports to watch

Nearly two thirds of European corporates are due to report earnings by the end of July.

Among them, three bellwether companies are likely to dictate much of the market’s tone for the quarter:

ASML Holding N.V. will report on 16 July. Europe’s largest semiconductor firm, with a market capitalisation of around €264 billion, is expected to post a 32% rise in EPS to €5.30, with revenues forecast at €7.61 billion, up 23% year-on-year. Investors will scrutinise results for evidence that AI-related demand continues to shield the company from broader geopolitical and trade pressures. Despite the AI tailwind, ASML shares have remained flat in 2025.

SAP SE, Europe’s largest listed company with a €308 billion market cap, reports on 22 July. Analysts forecast EPS of €1.46, up from €1.10 a year ago, with revenues expected to climb to €9.15 billion from €8.29 billion. Shares in the software giant are up around 11.5% so far this year, buoyed by investor optimism around digital transformation and cloud adoption.

UniCredit SpA will be the first major eurozone bank to report second-quarter results, also on 22 July. Markets will be focused on how banks are navigating the ECB’s rate-cutting cycle. With the central bank having lowered the deposit facility rate to 2% in June, analysts expect UniCredit’s EPS to dip by 3.5% year-over-year to €1.55, with revenue down 3% to €6.16 billion. Shares of UniCredit have surged 56% year-to-date, matching their entire 2024 gain in just over six months.

Source: Euronews

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China's PPI declines 3.6%

China's producer price index surprised on the downside in June, with a steep 3.6% y/y decline. This was below the May decline of 3.3% and the consensus of -3.2%. China has posted producer deflation for 33 successive months and the June figure marked the steepest slide since July 2023. Monthly, PPI declined by 0.4%, unchanged over the past three months.

The soft PPI report was driven by weak domestic demand and the continuing uncertainty over US tariffs. The lack of consumer demand was reflected in the weak CPI reading of 0.1% y /y, the first gain in four months. Monthly, CPI declined by 0.1%, following a 0.2% drop in May. There was a silver lining as core CPI rose 0.7% y/y, the fastest pace in 14 months.

The uncertainty over US President Trump's tariff policy continues to perplex the financial markets. Trump had promised a new round of tariffs against a host of countries on July 9 but he has delayed that deadline until August 1.

China, the world's second-largest economy after the US, has taken a hit from US tariffs, as China's exports to the US are down 9.7% this year, However, China has mitigated much of the damage as China's exports to the rest of the world are up 6%. There is a trade truce in effect between the two countries but the bruising trade war will continue to dampen US-China trade.

FOMC minutes - what will be Powell's tone?

With no tier-1 events out of the US today, the FOMC minutes of the June meeting will be on center stage. The Fed held rates at that meeting and Fed Chair Powell, who has taken a lot of heat from Donald Trump to cut rates, defended his wait-and-see-attitude, citing the uncertainty that Trump's tariffs are having on US growth and inflation forecasts.

AUDUSD Technical

AUD/USD tested resistance at 0.6532 earlier. Above, there is resistance at 0.6543

0.6519 and 0.6508 are the next support levels

China's PPI slides, Australian dollar steady_1

AUDUD 4-Hour Chart, July 9, 2025

Source: marketpulse

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Glendon

Economic

Forex

We richten de blik vandaag op Down Under. Zowel de centrale bank van Australië als die van Nieuw-Zeeland bogen zich de afgelopen dagen over het monetair beleid. Ze deelden de uitkomst – het status quo – maar niet de verwachtingen.

De Reserve Bank of Australia (RBA) verraste door de beleidsrente ongemoeid te laten op 3.85%. De Australische centrale bank is samen met de Noorse een monetaire laatkomer. Ze verlaagde de rente in februari van dit jaar pas een eerste keer nadat die ruim een jaar op 4.35% piekte. Dat is relatief laag voor het land in kwestie en dat verklaart meteen waarom de RBA pas laat de versoepelingscyclus (voor zover die naam waardig) aanving. De tweede stap volgde in mei. Dat was de eerste beleidsvergadering in de nasleep van Trump’s aangekondigde invoerheffingen. De RBA focuste daarom iets meer op de groei(risico’s). Op de discussietafel lag zelfs een renteknip van 50 bpn. De economische update die daarop volgde (omzetcijfers uit de kleinhandel, bbp-groei, het arbeidsmarktrapport en inflatie) was weinig overtuigend. De markt beschouwde een nieuwe renteverlaging in juli als verworven.

De dikke mist rond de economische toekomst is allesbehalve verdwenen maar de RBA wordt iets minder pessimistisch, vooral over het binnenlandse gegeven. Het afgelopen half jaar leverde bijvoorbeeld de bevestiging van het verhoopte herstel in private consumptie dankzij de nog steeds sterke arbeidsmarkt. Tegelijk zag de RBA in het meest recente maandelijkse inflatiecijfer risico’s dat het tweedekwartaalcijfer – de meest volledige en daardoor geprefereerde maatstaf – hoger uitvalt dan verwacht. De publicatiedatum is 30 juli. En dus wacht de RBA liever nog even tot de volgende vergadering op 12 augustus (incl. nieuwe voorspellingen). De centrale bank stelde in mei een landingszone voor de beleidsrente van 3.2% in 2026 voorop, ofte nog 2 à 3 renteverlagingen vanaf het huidige niveau. O.b.v. de communicatie deze week zien we dat voor de update in augustus meer als een bodem dan plafond. De markt loopt een eind voorop (4 à 5 verlagingen), wellicht geïnspireerd door de moeilijke context in Australië’s belangrijke Chinese handelspartner. Tegenover de Amerikaanse dollar, die tegen verminderde rentesteun aankijkt later dit jaar, kan de Australische naamgenoot daardoor waarschijnlijk beter stand houden dan tegen de euro. AUD/USD vervolgt het traject hoger in een gecontroleerd opwaarts hellend handelskanaal. EUR/AUD is mogelijks aan een periode van consolidatie toe binnen 1.70-1.80/85.

De Nieuw-Zeelandse centrale bank (RBNZ) hield de rente zoals verwacht op 3.25%. Na de rentevermindering in mei, sprak de Australische buur van een neutraal niveau. Daarmee veranderde ook haar reactiefunctie van anticiperen naar reageren, in functie van het verloop van de economie en inflatie. Dat blijkt ook uit de beleidsverklaring. De RBNZ besprak de case voor een renteverlaging in het licht van het huidige zwakke groeimomentum en algemene onzekerheid. Maar tegen de achtergrond van een gevreesde inflatieversnelling in het vorige en lopende kwartaal zag ze meer heil in wachten tot augustus. Uitstel, geen afstel en dus geen reden voor de kiwi dollar om hard van stapel te lopen. NZD/USD houdt post nabij 0.60, EUR/NZD in de buurt van 1.95. Ook voor de NZD zien we op middellange termijn meer potentieel tegen de USD dan tegen de euro.

Source: Bloomberg

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Adam

Stocks

Stock prices in Europe pushed higher on Wednesday, aided by optimism that the EU can strike a trade agreement with the US and avoid lofty tariffs.

The EU wants to strike a deal with the US "in the coming days" to avoid sweeping tariffs, a spokesman said Wednesday.

"The US has moved its deadline for finalising deals with partner countries to the first of August. However, we aim to reach a deal before then, potentially even in the coming days, we have shown our readiness to reach an agreement in principle," EU trade spokesman Olof Gill said.

The FTSE 100 index rose 29.03 points, 0.3%, to 8,883.21. The FTSE 250 was up 26.31 points, 0.1%, at 21,607.99, but the AIM All-Share was down 2.33 points, 0.3%, at 773.17.

The Cboe UK 100 was up 0.5% at 885.91, the Cboe UK 250 rose 0.1% to 19,106.76, and the Cboe Small Companies gave back 0.1% to 17,569.02.

In European equities on Wednesday, the CAC 40 in Paris jumped 1.2%, while the DAX 40 in Frankfurt surged 1.1%. Only a handful of blue-chips in Paris and Frankfurt traded lower.

Germany's Chancellor Friedrich Merz said Wednesday he was "cautiously optimistic" about the prospects of a deal between the EU and the US to avert increased tariffs threatened by President Donald Trump.

"I am cautiously optimistic that we may succeed in reaching an agreement with the US in the next few days or at the latest by the end of the month," Merz told parliament.

Rostro analyst Joshua Mahony said investors a positioning "themselves in anticipation of a potential breakthrough in trade talks between the US and EU".

"German Chancellor Merz provided one such voice, noting that he is cautiously optimistic thanks to ongoing intensive contact with the US government. However, whilst there is a potential framework for a deal being put together, the apparent US insistence of a 17% tariff on EU agricultural goods does provide a potential roadblock going forward. This is where it becomes difficult to please all parties, as the priorities of the German (autos) will be very different to the French (agri)," the analyst added.

The yield on the US 10-year Treasury was quoted at 4.41% early Wednesday afternoon, slimming from 4.42%, where it stood at the time of the London equities close on Tuesday. The yield on the US 30-year Treasury was quoted at 4.93%, easing from 4.96%.

Stocks in New York are called to open higher. The Dow Jones Industrial Average is called up 0.2%, and the S&P 500 and Nasdaq Composite up 0.1%.

President Trump said Tuesday that he would not extend an August 1 deadline for higher US tariffs to take effect on dozens of economies, while announcing plans for a 50% duty on copper imports.

"That's a shift in tone from Trump's own comments on Monday evening, as Trump had said that the August 1 date was "not 100% firm", and investors had been hopeful that ongoing negotiations and trade deals could avoid that. So it's a clear hardening up of the rhetoric," analysts at Deutsche Bank commented.

"In addition, the president took a more hawkish tone, indicating that some countries would be seeing a 60% or 70% tariff rate and that sectoral tariffs are coming."

Trump also said Washington would soon make an announcement on pharmaceuticals, but officials would allow manufacturers time to relocate their operations into the country.

"We're going to give people about a year, a year and a half to come in, and after that, they're going to be tariffed," he said. "They're going to be tariffed at a very, very high rate, like 200%."

Apart from copper and pharmaceuticals, Trump has ordered probes into imports of lumber, semiconductors and critical minerals that could lead to further levies.

Rostro's Mahony added: "With roughly half of US copper coming from abroad, there is a clear desire to remove this dependency."

In London, Glencore was down 2.6%, Anglo American shed 2.2%, while Antofagasta fell 1.6%.

WPP was the worst FTSE 100 performer, however, slumping 17%. The advertising firm cut guidance following a tricky first half. WPP now expects a 2025 like-for-like revenue decline, excluding pass through costs, between 3% and 5%. It predicts a decline in headline operating profit margin of 50 to 175 basis points, excluding foreign exchange.

It also sees "continued macro uncertainty weighing on client spend" going forward.

The pound rose to USD1.3586 early Wednesday afternoon, from USD1.3574 at the time of the London equities close on Tuesday. The euro fell to USD1.1704 from USD1.1709 while against the yen, the dollar fell to JPY146.61 from JPY146.82.

Trade tariffs could increase the risk of some businesses falling behind on loans, while a high proportion of the UK workforce is in sectors more exposed to global shocks, the Bank of England has warned.

Households and businesses nonetheless remain resilient, and the UK banking system is equipped to support them even if conditions significantly worsen, the Bank's Financial Policy Committee, FPC, said in its latest report.

The FPC said there was a high degree of unpredictability about how global trade will evolve, with US President Donald Trump hiking tariff rates in April but negotiations with other countries over possible trade deals ongoing.

Conflict in the Middle East has also raised the risk of energy prices spiking, particularly if the supply of oil and gas were disrupted, it found.

However, the FPC concluded that despite pockets of vulnerability, UK businesses would typically be able to pay their debts even in the face of further global volatility such as lower demand and supply.

Furthermore, the report found that the UK banking system has the capacity to support households and businesses even if economic and business conditions became substantially worse than expected.

A barrel of Brent traded at USD69.85 midday Wednesday, flat from USD69.87 late Tuesday afternoon. Gold fell to USD3,295.22 an ounce from USD3,297.61.

Back in London, Galliford Try rose 3.2%. It expects to report a full-year performance ahead of forecasts.

The construction company predicted revenue and adjusted pretax profit ahead of the current market forecasts for the year ended June 30. It puts the consensus range for revenue between GBP1.86 billion and GBP1.89 billion, and the profit range between GBP40.1 million and GBP41.6 million.

"I am delighted that all our operations continued to perform strongly throughout the second half of the year and we expect to report another year of increased revenue and profit in September," CEO Bill Hocking said.

Over in Paris, EssilorLuxottica was on the rise, surging 5.9%. Meta Platforms has snapped up a roughly 3% stake in Ray-Ban maker, Bloomberg reported on Tuesday.

Meta has bought a stake worth roughly EUR3 billion, now owning just under 3% of Paris-listed EssilorLuxottica. Bloomberg cited people familiar with the matter.

The sources said Menlo Park, California-based Meta could build its stake to around 5%.

The duo currently team for the Meta AI range of products, which include Ray-Ban and Oakley smart glasses.

Still to come on Wednesday, minutes from the Federal Reserve's most recent meeting are released at 1900 BST.

"Tonight's minutes could tilt sentiment if they reveal more dovish consensus than currently priced," SPI Asset Management analyst Stephen Innes commented.

source : Alliance News

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Warren Takunda

Economic

President Donald Trump and his advisers promised a lightning round of global trade negotiations with dozens of countries back in April.

White House trade adviser Peter Navarro predicted “90 deals in 90 days.’’ Administration officials declared that other countries were desperate to make concessions to avoid the massive import taxes – tariffs -- that Trump was threatening to plaster on their products starting July 9.

But the 90 days have come and gone. And the tally of trade deals stands at two – one with the United Kingdom and one with Vietnam. Trump has also announced the framework for a deal with China, the details of which remain fuzzy.

Trump has now extended the deadline for negotiations to Aug. 1 and tinkered with his threatened tariffs, leaving the global trading system pretty much where it stood three months ago — in a state of limbo as businesses delay decisions on investments, contracts and hiring because they don’t know what the rules will be.

“It’s a rerun, basically,’’ said William Reinsch, a former U.S. trade official who’s now an adviser with the Center for Strategic and International Studies think tank. Trump and his team “don’t have the deals they want. So they’re piling on the threats.”

The pattern has repeated itself enough times to earn Trump the label TACO — an acronym coined by The Financial Times’ Robert Armstrong that stands for “Trump Always Chickens Out.”

“This is classic Trump: Threaten, threaten more, but then extend the deadline,” Reinsch said. “July 30 arrives, does he do it again if he still doesn’t have the deals?’’ (Trump said Tuesday that there will be no more extensions.)

The deal drought represents a collision with reality.

Negotiating simultaneously with every country on earth was always an impossible task, as Trump himself belatedly admitted last month in an interview with the Fox News Channel. (“There’s 200 countries,’’ the president said. “You can’t talk to all of them.’’) And many trading partners — such as Japan and the European Union — were always likely to balk at Trump’s demands, at least without getting something in return.

“It’s really, really hard to negotiate trade agreements,” which usually takes several months even when it involves just one country or a small regional group, said Chad Bown, an economic adviser in the Obama White House and now senior fellow at the Peterson Institute for International Economics. “What the administration is doing is negotiating a bunch of these at the same time.’’

The drama began April 2 – “Liberation Day,’' Trump called it — when the tariff-loving president announced a so-called baseline 10% import tax on everybody and what he called “reciprocal’’ levies of up to 50% on countries with which the United States runs trade deficits.

The 10% baseline tariffs appear to be here to stay. Trump needs them to raise money to patch the hole his massive tax-cut bill is blasting into the federal budget deficit.

By themselves, the baseline tariffs represent a massive shift in American trade policy: Tariffs averaged around 2.5% when Trump returned to the White House and were even lower before he started raising them in his first term.

But the reciprocal tariffs are an even bigger deal.

In announcing them, Trump effectively blew up the rules governing world trade. For decades, the United States and most other countries abided by tariff rates set through a series of complex negotiations known as the Uruguay round. Countries could set their own tariffs – but under the “most favored nation’’ approach, they couldn’t charge one country more than they charged another.

Now Trump is setting the tariff rates himself, creating “tailor-made trade plans for each and every country on this planet,’’ in the words of White House press secretary Karoline Leavitt.

But investors have recoiled at the audacious plan, fearing that it will disrupt trade and damage the world economy. Trump’s Liberation Day tariffs, for instance, set off a four-day rout in global financial markets. Trump blinked. Less than 13 hours after the reciprocal tariffs took effect April 9, he abruptly suspended them for 90 days, giving countries time to negotiate with his trade team.

Despite the Trump administration’s expressions of confidence, the talks turned into a slog.

“Countries have their own politics, their own domestic politics,” Reinsch said. “Trump structured this ideally so that all the concessions are made by the other guys and the only U.S. concession is: We don’t impose the tariffs.’’

But countries like South Korea and Japan needed “to come back with something,’’ he said. Their thinking: “We have to get some concessions out of the United States to make it look like this is a win-win agreement and not a we-fold-and-surrender agreement. ”

Japan, for example, wanted relief from another Trump tariff — 50% levies on steel and aluminum.

Countries may also be hesitant to reach a deal with the United States while the Trump administration conducts investigations that might result in new tariffs on a range of products, including pharmaceuticals and semiconductors.

Frustrated by the lack of progress, Trump on Monday sent letters to Japan, South Korea and 12 other countries, saying he’d hit them with tariffs Aug. 1 if they couldn’t reach an agreement. The levies were close to what he’d announced on April 2; Japan’s, for example, would be 25%, compared to the 24% unveiled April 2.

Trump did sign an agreement last month with the United Kingdom that, among other provisions, reduced U.S. tariffs on British automotive and aerospace products while opening the U.K. market for American beef and ethanol. But the pact kept the baseline tariff on British products mostly in place, underlining Trump’s commitment to the 10% tax despite the United States running a trade surplus — not a deficit — with the U.K. for 19 straight years, according to the U.S. Commerce Department.

On July 2. Trump announced a deal with Vietnam. The Vietnamese agreed to let U.S. products into the country duty free while accepting a 20% tax on their exports to the United States, Trump said, though details of the agreement have not been released.

The lopsided deal with Vietnam suggests that Trump can successfully use the tariff threat to bully concessions out of smaller economies.

“They just can’t really negotiate in the same way that the (European Union) or Korea or Japan (or) Canada can negotiate with the United States,’’ said Dan McCarthy, principal in McCarthy Consulting and a former official with the Office of the U.S. Trade Representative in the Biden administration. “A lot of (smaller) countries just want to get out of this and are willing to cut their losses.’’

But wrangling a deal with bigger trading partners is likely to remain tougher.

“The U.S. is gambling that these countries will ultimately be intimidated and fold,” Reinsch said. “And the countries are gambling that the longer this stretches out, and the longer it goes without Trump producing any more deals, the more desperate he gets; and he lowers his standards.

“It’s kind of a giant game of chicken.’’

Source: AP

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Glendon

Economic

Forex

The European Union said it was working on sealing a trade deal with the United States by the end of the month, while U.S. President Donald Trump promised that he would deliver further tariff notices on unnamed countries on Wednesday.

Trump broadened out a trade war that has cast a shadow over the global economic outlook when he said on Tuesday he would impose a 50% tariff on imported copper and soon introduce long-threatened levies on semiconductors and pharmaceuticals.

Trump said late on Tuesday that "a minimum of seven" tariff notices would be released on Wednesday morning, and more in the afternoon. He gave no other details in his Truth Social post.

The threat came a day after he pressured 14 trading partners, including powerhouse U.S. suppliers South Korea and Japan, with tariff letters imposing levies of 25% and upwards to take effect from August 1.

NEGOTIATIONS WITH THE EU

Trump said trade talks have been going well with China and the European Union, which is the biggest bilateral trading partner of the U.S.

Trump said he would "probably" tell the EU within two days what rate it could expect for its exports to the U.S., adding that the 27-nation EU had become much more cooperative.

"They treated us very badly until recently, and now they're treating us very nicely. It's like a different world, actually," he said.

European Commission President Ursula von der Leyen gave a guarded response.

"We stick to our principles, we defend our interests, we continue to work in good faith, and we get ready for all scenarios," von der Leyen told the European Parliament.

A European Commission spokesperson said that the EU aimed to reach a trade deal before August 1, potentially even in the coming days.

However, Italian Economy Minister Giancarlo Giorgetti warned that talks between the two sides were "very complicated" and could continue right up to the deadline.

HIGHEST TARIFF LEVELS SINCE 1934

Equity markets shrugged off Trump's latest tariff salvo on Wednesday, while the yen remained on the back foot after the levies set for Japan.

Following Trump's announcement of higher tariffs for imports from the 14 countries, U.S. research group Yale Budget Lab estimated consumers face an effective U.S. tariff rate of 17.6%, up from 15.8% previously and the highest in nine decades.

Trump's administration has been touting those tariffs as a significant revenue source. Treasury Secretary Scott Bessent said Washington has taken in about $100 billion so far and could collect $300 billion by the end of the year. The United States has taken in about $80 billion annually in tariff revenue in recent years.

Source: Yahoo Finance

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Adam

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Market Overview

U.S. stock futures are little changed early Wednesday as traders monitor additional tariff developments from President Trump.

Dow futures rise 23 points (0.05%), S&P 500 futures add 0.02%, and Nasdaq 100 futures are flat.

Tuesday’s session was cautious, with the S&P 500 down 0.07%, Nasdaq up 0.03%, and Dow off 0.4% following Trump’s new 25%–40% tariffs on 14 countries effective August 1.

Trump reiterated there will be no extensions, announced a 50% levy on copper imports, and hinted at potential 200% tariffs on pharmaceuticals within 12–18 months. Traders remain focused on additional sector-specific levies, with Global X’s Scott Helfstein noting persistent trade policy volatility as markets recalibrate inflation risk and supply chain disruptions.

Key Economic Releases

At 1400 GMT, Final Wholesale Inventories m/m will be released (forecast -0.2%, previous -0.3%), providing insight into Q2 GDP tracking.

At 1430 GMT, the EIA Crude Oil Inventories report is expected, with a forecast draw of -1.7M barrels vs. last week’s +3.8M build, following API data showing a 7.1M build while refined products fell.

At 1701 GMT, the 10-year Bond Auction will proceed, with the prior yield at 2.5% and current indicative yield near 4.42%, reflecting tightening financial conditions.

Central Bank Activity

At 1800 GMT, the FOMC Meeting Minutes will be released, closely watched for clues on rate path amid trade uncertainties.

Deutsche Bank’s Amy Yang notes a Fed split: dovish members focusing on labor market downside risks despite potential tariff-driven inflation, hawkish members preferring to wait for data confirmation, and Powell maintaining a middle-ground stance.

The September meeting is seen as the earliest “live” cut unless labor data weakens sharply, with market pricing for a potential cut before December rising as trade tensions persist.

Notable Earnings

No major pre-market reports are scheduled. Post-close, AZZ (AZZ) is set to report, with consensus at $1.58 per share.

Commodities, Crypto, and Bonds

Gold hovers near a one-week low under pressure from a firmer dollar and higher Treasury yields as fresh tariff threats unsettle markets. The NY Fed’s survey shows one-year inflation expectations easing to 3% from 3.2%, with three- and five-year expectations steady at 3% and 2.6%.

Copper futures surged over 12% to record highs on Trump’s 50% tariff announcement, while SHFE and LME prices retreated as arbitrage closed.

Oil prices ease from two-week highs as traders await tariff clarity and potential OPEC+ output hikes, while EIA data will confirm if the recent large API-reported build is sustained.

Technical Outlook

Daily E-mini S&P 500 Index

S&P 500 E-mini Futures (ES): Trading at 6274.25, near the recent high of 6333.25. Immediate resistance remains at 6333.25. Supports below are 6127.00 and 5959.00, with the 200-day SMA at 5986.1 followed by the 50-day SMA at 5995.1 providing layered support if momentum fades.

The Day Ahead: Markets Brace for Today’s Fed Minutes, Oil Data, Tariff Risks_2

Daily E-mini Dow Jones Industrial Average

Dow E-mini Futures (YM): Trading at 44,561, below the 45,177 high. Immediate resistance is 45,177. Supports below are the 200-day SMA at 43,531, the 50-day SMA at 42,811.4, followed by 42,088 and 41,552. This layered structure offers clear downside markers while the trend remains intact.

The Day Ahead: Markets Brace for Today’s Fed Minutes, Oil Data, Tariff Risks_3

Daily E-mini Nasdaq 100 Index Futures

Nasdaq 100 E-mini Futures (NQ): Trading at 22,916.75 after a recent high of 23,102.50. Immediate resistance is 23,102.50. Supports are 21,566.75 and 20,943.50, with the 200-day SMA at 21,276.7 followed by the 50-day SMA at 21,659.4 acting as layered downside supports should momentum soften near highs.

Outlook

Tariff developments and FOMC minutes remain key drivers, with traders monitoring potential sector-specific levies and Fed language for policy direction.

Wholesale inventories and EIA crude data will influence GDP tracking and energy sentiment intraday.

Expect choppy trade around tariff headlines and Fed positioning as markets gauge the timing of potential rate cuts amid persistent trade-driven risks.