Weekly Market Summary: Trade Truce and Tech Surge

Weekly Market Summary: Trade Truce and Tech Surge

Wall Street: Rally Driven by Tech Stocks and Trade Truce

S&P 500, Nasdaq, and Dow Jones Post Strong Gains

The U.S. stock market experienced a week of bullish momentum fueled by both economic and geopolitical developments.

• S&P 500 closed with a 5.3% weekly gain.
• Nasdaq Composite surged 7.2%.
• Dow Jones Industrial Average climbed 3.4%.

This rally was enough to push the Dow back into positive territory for 2025, erasing weeks of previous uncertainty.

The gains came despite disappointing consumer sentiment data, such as the University of Michigan’s index, which fell to its second-lowest level on record. However, investors appeared to look past these figures, instead focusing on corporate growth expectations and the easing of global trade tensions.

Nvidia, Apple, and Meta Lead the Tech Surge

Tech stocks were the clear winners this week. Nvidia (NVDA) posted an impressive 16% increase, driven by AI enthusiasm and new initiatives in China. Meta Platforms (META) rose 8%, while Apple (AAPL) gained 6%, further solidifying its role in shaping the U.S. macroeconomic landscape. Microsoft (MSFT) also saw a 3% gain.

These companies benefited not only from strong earnings, but also from their ability to adapt to a complex regulatory and trade environment.

U.S.-China Truce Reframes Investor Sentiment

The Wall Street rally was catalyzed by the announcement of a 90-day trade truce between the U.S. and China, a move that temporarily alleviated inflationary pressures stemming from tariff escalations. This pause allowed markets to reprice the risk of stagflation, a scenario that until recently dominated analysts’ concerns.

Jamie Cox, of Harris Financial Group, summarized it best: “The American consumer says they’re worried, but they’re not spending like it. Once you filter out the noise, consumption trumps everything.“

Consumer Pessimism Persists, but Spending Holds Firm

Interestingly, while consumer sentiment declined and inflation expectations for the year rose from 6.5% to 7.3%, spending levels remained strong. This divergence has been interpreted as evidence of the resilience of the U.S. economy, particularly among consumers, who continue to spend despite economic uncertainty.

Europe: Record Highs Amid Luxury Gains and Macroeconomic Stability

STOXX 600 Logs Fifth Consecutive Week of Gains

European markets also enjoyed a positive week.

• STOXX 600 index posting its fifth straight weekly gain, rising approximately 2%.

This performance was driven by macroeconomic stability and the ripple effect of the U.S.-China trade truce, which temporarily eased fears of a full-blown global trade war.

Against this backdrop, several European stock exchanges reached new milestones.

• Germany’s DAX closed at a record high.
• France’s CAC 40 and the U.K.’s FTSE 100 climbed to their highest levels in over a month.

Richemont and AstraZeneca Stand Out in Their Sectors

Key sectors led the rally in Europe. In luxury, Richemont (CFR) surprised markets with a 7% increase in quarterly sales, pushing its stock up nearly 7%. This strong performance lifted the luxury index by 2.2% and the personal and household goods sector by 1.2%.

In healthcare, AstraZeneca (AZN) and Novartis (NVS) helped drive a 1.2% rise in the European health index, supported by positive earnings reports and optimism about pharmaceutical innovation in the region.

ECB Cautious Despite Positive Outlook

Despite the broadly upbeat tone, the European Central Bank (ECB) injected a note of caution. Governing Council member Martins Kazaks stated that interest rates may have reached their lowest point, though he warned that ongoing uncertainty and sudden shocks could alter the policy path.

Markets interpreted this as a signal that the ECB may take a more cautious stance moving forward, awaiting further clarity on global conditions before adjusting monetary policy again.

Geopolitical Tensions: Russia-Ukraine Talks Yield No Progress

On the geopolitical front, investors closely followed the direct peace talks between Russia and Ukraine—the first in over three years. However, no concrete progress was made. Russian demands were described by Ukrainian sources as “non-starters”, leaving Eastern European tensions unresolved, with potential spillovers into energy markets and investor sentiment.

Commodities: Oil Gains, Gold Pulls Back, and the Dollar Strengthens

Brent and WTI Post Moderate Gains

The oil market ended the week with moderate gains, supported by easing trade tensions between the U.S. and China, but still weighed down by expectations of a global supply increase.

• Brent crude settled at $65.41 per barrel (+1.4%).
• West Texas Intermediate (WTI) rose to $62.49 (+2.4%).

These increases reflected growing optimism following the trade truce between the world’s two largest economies—and top oil consumers. Still, analysts cautioned that the projected output growth from OPEC+ and potentially Iran could limit further price advances.

Iranian Nuclear Deal Could Boost Global Supply

Negotiations between Washington and Tehran progressed during the week, with President Trump stating a deal was “very close.” If finalized, it could lift sanctions on Iranian crude exports, adding up to 400,000 barrels per day.

This potential influx of oil has curbed the market’s recovery momentum, and experts suggest that strong seasonal travel demand in the coming months will be essential to offset the looming supply surge.

Gold Retreats as Risk Appetite Improves

Meanwhile, gold experienced its worst week in six months, falling nearly 10% from its record high of $3,500 per ounce reached in April. Improved risk sentiment following the U.S.-China truce reduced demand for safe-haven assets, shifting investor flows toward equities and riskier bets.

Despite the pullback, analysts like Nitesh Shah (WisdomTree) and Ole Hansen (Saxo Bank) maintain a bullish medium-term outlook, supported by sustained central bank demand—especially from China—and expectations of declining real interest rates.

Dollar Strengthens; All Eyes on the Fed

The U.S. Dollar Index (DXY) recorded its fourth consecutive weekly gain, driven by mixed economic data and growing speculation that the Federal Reserve could begin cutting interest rates in September. Rising Treasury yields further pressured gold prices, making the non-yielding metal less attractive to investors.

Despite the week’s movements, markets remain in wait-and-see mode, closely monitoring inflation and growth data that could shape the Fed’s monetary policy outlook in the second half of the year.

Key Companies: Mergers, Earnings, and Global Strategies

Charter-Cox Merger Reshapes the Telecom Landscape

One of the week’s standout corporate moves was the $34.5 billion merger between Charter Communications (CHTR) and Cox Communications. The deal includes the acquisition of Cox’s commercial fiber and IT services divisions, while Cox Enterprises will retain a 23% stake in the newly combined entity.

The merger aims to solidify Charter’s position in the U.S. telecom market by delivering enhanced infrastructure and broader commercial coverage, at a time when competition in the telecom sector intensifies with the expansion of 5G networks and the growing digitalization of business services.

Walmart, Regeneron, and BioMarin Navigate Market Volatility

Walmart (WMT) impressed investors by achieving profitability in its eCommerce division for the first time. The retail giant also projects 4% full-year sales growth, showcasing its ability to manage logistical and tariff-related headwinds while reinforcing its omnichannel strategy.

In healthcare, Regeneron (REGN) secured a favorable ruling in an antitrust lawsuit against Amgen (AMGN), concerning bundling practices in the cholesterol treatment market. Additionally, BioMarin Pharmaceutical (BMRN) announced a $270 million acquisition of Inozyme Pharma (INZY), expanding its late-stage pipeline of therapies for rare diseases.

Nvidia and Boeing Strengthen Global Presence

Nvidia (NVDA), despite facing U.S. export restrictions, announced plans to open a new R&D center in Shanghai, reaffirming its commitment to China—a market that accounted for 14% of its 2024 revenue. The move aims to meet local demand while remaining compliant with international trade laws.

Meanwhile, Boeing (BA) and GE Aerospace (GE) signed a $14.5 billion deal with Etihad Airways as part of a broader $200 billion U.S.-UAE trade agreement. This high-profile contract not only boosts American aerospace exports but also underscores deepening commercial ties between Washington and Abu Dhabi.

Microsoft, Tesla, and Apple: Regulation, Expansion, and Leadership

On the regulatory front, Microsoft (MSFT) remains under European Commission scrutiny over antitrust issues related to its Teams platform. The tech giant has proposed to unbundle Teams from its software suite and enhance interoperability with rivals in an effort to meet EU compliance standards.

Tesla (TSLA) appointed Jack Hartung, a former executive at Chipotle (CMG) and McDonald’s (MCD), to its board of directors. His extensive experience in the consumer goods sector is expected to support Tesla’s strategic initiatives amid operational and market challenges.

As for Apple (AAPL), the company announced it will continue operating its manufacturing hubs in India and China, despite pressure from U.S. policymakers. This reflects a diversified geopolitical approach, while Apple also ramps up investment in artificial intelligence projects across its U.S. operations.

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Permíteme presentarme: soy Ignacio N. Ayago, un emprendedor consolidado 🚀, papá con poderes 🦄, un apasionado de la tecnología y la inteligencia artificial 🤖 y el fundador de esta plataforma 💡. Estoy aquí para ser tu guía en este emocionante viaje hacia el crecimiento personal 🌱 y el éxito financiero 💰.

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