European markets open on a quieter note

David Morrison

SENIOR MARKET ANALYST

01 Jul 2025

Share this article on social

European stock indices began Tuesday’s session on a quieter note, with most lower in early trade. Investor risk appetite was dampened as traders await the outcome of trade negotiations with the US, and wonder how much room there is for compromise, or even yet another deadline extension.

Last week’s news that the US and China had set a framework for a deal helped to boost global risk assets. But the EU is a different proposition. It must marshal all its heads of state, some of whom have expressed a visceral dislike of the current US President.

Related News

NEWS AND INSIGHTS

US markets surge as Trump hints at tariff breaks

NEWS AND INSIGHTS

Crude oil rises as US tariffs and OPEC+ cuts boost prices

NEWS AND INSIGHTS

Markets steady as data weakness raises questions

Record-breaking day for US equities

US stock indices kicked off the week on a strong note, with both the US 500 Index and US Tech 100 surging to fresh all-time highs. Monday’s advance was fuelled by progress on trade negotiations, some upbeat corporate earnings and continued signs of economic resilience, reinforcing optimism that economic growth remains decent even in the face of geopolitical uncertainty.

The S&P 500 and tech-heavy NASDAQ both closed 0.5% up. The Dow Jones outpaced them, closing 0.6% higher, while the mid-cap Russell 2000 eked out a modest gain of 0.1%.

Source: TN Trader

Meta Platforms led the rally across tech, hitting a record high as CEO Mark Zuckerberg announced a major AI hiring spree. The move signals continued investment in next-generation technology and further underscores investor appetite for high-growth names.

Asian Pacific stock indices mixed

Asian Pacific stock indices largely tracked the strength across Wall Street on Monday. But these were capped by a pullback in Japanese equities. The Nikkei fell 1.2%, giving back all of yesterday’s gains, and more, while dropping back from an eleven-month high.

President Trump took to Truth Social to criticise Japan for refusing to import US-grown rice, despite an apparent domestic shortage. He called Japan “spoiled” and warned that a fresh round of tariffs would soon be announced. The sharp rhetoric weighed heavily on Japanese equities, highlighting the lingering risk of trade-related volatility.

While a marginally better confidence print offered some support, the Tankan survey also showed that both small and large business owners were less sanguine about the future, with trade and tariff threats a major concern.

Elsewhere, China’s Shanghai Composite rose 0.2% while Hong Kong markets were closed for a public holiday. Australia’s ASX 200 was unchanged.

Tariff deadline looms as global negotiations intensify

With President Trump’s 9th July tariff deadline fast approaching, global markets remain highly sensitive to trade developments. Over the weekend and into Monday, signals from the White House remained mixed. 

While some officials hinted at flexibility over the deadline, others suggested the President may proceed unilaterally - including a plan to send letters to foreign governments, bypassing ongoing negotiations.

The European Union (EU) is now scrambling to secure quota-based exemptions on autos, steel, and aluminium, hoping to blunt the impact of higher duties. Traders are cautiously optimistic that deals will materialise in time, especially after Canada reversed its digital services tax in an effort to keep trade talks alive.

Canada’s climbdown came soon after President Trump announced a full halt to trade discussions on Friday. The move highlights how reactive markets are to the President’s tariff agenda.

Broader market highlights: A quarter to remember

The MSCI Asia Pacific Index (MXAP) just wrapped up its best quarter since 2022, reflecting the breadth of this year’s equity rally. Emerging market shares posted their strongest first half in eight years, while US indices also delivered impressive returns.

The US 500 surged 9% over the quarter, its best performance since 2023. The quarter began with a sharp sell-off as President Trump announced his reciprocal tariffs. But stock indices subsequently roared back to life as investors noted that the President was quite open to backing away from his initial position to ensure that deals could be made. 

In stark contrast, the Dollar Index suffered its worst first-half performance since 1973, underscoring the impact of political and monetary policy crosscurrents on the greenback.

US dollar falls further

Currency markets were active overnight with the euro extending its rally to break above 1.1800 against the US dollar. The single currency continues to push higher amid broad dollar weakness and ongoing concerns over trade, tariffs, national debt and central bank independence. 

Sterling was also strong, with the GBP/USD hitting its highest level since November 2021 and rallying towards 1.3800. The dollar index continued to drift lower, reflecting uncertainty surrounding Trump’s repeated calls to replace Fed Chair Powell later this year.

Source: TN Trader

Gold eyes key resistance

Gold added to yesterday’s gains. On Monday, gold broke back above $3,300 to close near its daily high. It retested $3,300 this morning, and the level held as support. Gold saw increased investor demand during the Asian Pacific session overnight, due to lingering inflation concerns. 

Despite the rebound, gold remains well off its all-time high of $3,500 hit back in April. Traders appear cautious ahead of US data, particularly as inflation and Fed policy remain central to the metal’s near-term direction.

Source: TN Trader

Oil holds steady near $66

Oil prices continue to stabilise, with tight intra-day trading ranges. Front-month WTI was back below $65 per barrel this morning, apparently content to consolidate around levels pertaining before Israel launched airstrikes against Iran.

Source: TN Trader

Market participants remain focused on broader geopolitical developments, particularly around tariffs and potential Middle East disruptions. However, the lack of a clear catalyst has kept oil in a holding pattern for now, with traders awaiting fresh signals to determine the next move. Many may be content to sit on their hands ahead of the OPEC+ meetings this weekend.

Market outlook

It was another record-setting day for US equities, with the bulls firmly in control. Headlines from Meta Platforms, progress on trade, and the dialling down of hostilities between Israel and Iran earnings helped to offset last week’s downward revision to US GDP and an above-target inflation print.

The week ahead holds plenty of potentially market-moving catalysts. Today, they include comments from the world’s major central bankers who meet in Portugal for the ECB’s annual forum. 

There’s also the US ISM Manufacturing PMI and JOLTS Job Openings data, with any updates on tariff negotiations also thrown into the mix ahead of President Trump’s 9th July deadline. Overall, the trend remains up for US stock indices. But with global politics back in focus, volatility could return just as quickly.


Suggested articles

See allarrow-icon
arrow-icon

Gain the edge

Sign up and unlock early
access to exclusive trading
insights and educational tips.

I confirm I am 18 years old or above.

By signing up to hear from us, you agree to our terms and privacy policy.

Please keep me updated on Trade Nation’s sponsorships, news, events and offers.

The markets are moving.

Start trading now.

Get startedarrow-icon
arrow-icon

Trade on our
award-winning
platform


en-gb

Payment methods

Trade on

Regulatory bodies

UK - FCA

Australia - ASIC

Seychelles - FSA

Bahamas - SCB

South Africa - FSCA

Customer support

Sponsors of your favourite teams

The legal stuff

Financial Spread Bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Refer to our legal documents.

Trade Nation is a trading name of Trade Nation Financial UK Ltd, a financial services company registered in England & Wales under company number 07073413, is authorised and regulated by the Financial Conduct Authority under firm reference number 525164. Our registered office is 14 Bonhill Street, London, EC2A 4BX, United Kingdom.

Trade Nation is a trading name of Trade Nation Australia Pty Ltd, a financial services company registered in Australia under number ACN 158 065 635, is authorised and regulated by the Australian Securities and Investments Commission (ASIC), with licence number AFSL 422661. Our registered office is Level 17, 123 Pitt Street, Sydney, NSW 2000, Australia.

Trade Nation is a trading name of Trade Nation Ltd., a financial services company registered in the Bahamas under number 203493 B, is authorised and regulated by the Securities Commission of the Bahamas (SCB), with licence number SIA-F216. Our registered office is No. 3 Bayside Executive Park, West Bay Street & Blake Road, Nassau, New Providence, The Bahamas.

Trade Nation is a trading name of Trade Nation Financial Markets Ltd, a financial services company registered in the Seychelles under number 810589-1, is authorised and regulated by the Financial Services Authority of Seychelles (FSA) with licence number SD150. Our registered office is CT House, Office 6B, Providence, Mahe, Seychelles.

Trade Nation is a trading name of Trade Nation Financial (Pty) Ltd, a financial services company registered in South Africa under number 2018 / 418755 / 07, is authorised and regulated by the Financial Sector Conduct Authority (FSCA), with licence number 49846. Our registered office is 19 9th Street, Houghton Estate, Johannesburg, Gauteng, 2198 South Africa. 

The information on this site is not directed at residents of the United States or any particular country outside the UK, Australia, South Africa, The Bahamas or Seychelles and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

© 2019-2025 Trade Nation. All Rights Reserved