Stocks Stall as Trump Dims EU Trade Deal

Global stock markets largely stalled on Friday as a recent trade-related rally lost momentum, exacerbated by US President Donald Trump’s pessimistic assessment of striking a trade deal with the European Union (EU).

Trump stated he saw barely a “50/50 chance, maybe less” of an agreement, dampening investor optimism that had fueled market gains earlier in the week.

Trade Doubts and Market Performance

Wall Street indices opened slightly positive but struggled to gain ground as investors also processed a mixed bag of corporate earnings.

Major European indices were all down by mid-afternoon, while Asian markets closed in negative territory.

This week’s earlier positive sentiment, driven by a US-Japan trade deal and hints of a US-EU accord, failed to sustain momentum. XTB research director Kathleen Brooks noted that European stocks were “weaker at the end of the week.”

Despite the cautious atmosphere, some trade optimism persisted as Brussels and Washington reportedly neared a deal that could halve threatened US tariffs.

However, a lack of confirmation from the US side kept sentiment fragile ahead of the August 1 tariff deadline.

In preparation for potential talks failure, EU member states have already approved a 93 billion-euro ($109 billion) package of counter-tariffs.

Mixed Corporate Earnings and Fed Speculation

With few positive catalysts, Asian markets like Tokyo, Hong Kong, and Shanghai retreated.

In the US, while the S&P 500 and Nasdaq hit new records on Thursday, strong jobs data suggested the US Federal Reserve might delay interest rate cuts, leading to the dollar extending gains as investors adjusted rate forecasts.

President Trump publicly urged Fed chief Jerome Powell to cut rates during a visit to the Fed headquarters.

In corporate news, German auto giant Volkswagen reported a 1.3 billion-euro ($1.5 billion) hit from US tariffs in the first half of the year, alongside falling profits.

Despite an initial drop, its shares rebounded over four per cent by mid-afternoon. Conversely, German sportswear maker Puma saw its shares tumble around 16 per cent after slashing its sales forecast and warning of a full-year loss.

Meanwhile, UK bank NatWest topped the FTSE 100 gainers, rising about three per cent after reporting increased second-quarter net profit and an improved full-year outlook.