After the heated back and forth surrounding the issue of tariffs, the markets welcomed the trade agreements between the US and Japan as well as the European Union. They were equally positive about the "One Big Beautyful Bill Act", the US government's fiscal policy plans under Donald Trump.
The international stock markets performed largely positively in July, driven by a good performance on the US stock markets. The European stock markets were mostly weaker, but also performed positively, while the stock markets in Japan and Hong Kong performed well.
July 2025 was characterized by progress in international trade agreements. Among other things, the USA reached an agreement with Japan and, towards the end of the month, with the European Union. Following the threat of tariffs of 30%, most imports from the EU to the US will be subject to a tariff rate of 15% from August. The stock markets took a positive view of this agreement, as it reduces the risk of a further escalation of the trade conflict, even if the new tariff rate is significantly higher than the previous average tariff (2.4% on EU goods). The resumption of talks between the US and China provided additional hope for stability.
In addition, the US Congress passed the "One Big Beautiful Bill Act" (OBBBA). This "one big beautiful bill" summarizes US President Donald Trump's fiscal policy plans, including a permanent reduction in income tax, further tax relief, new write-offs for companies, additional spending on defence and an extension of the debt ceiling. The OBBBA is likely to accelerate further US indebtedness, but brought clarity with regard to the future political path and was therefore welcomed on the equity markets.
The reporting season for the second quarter was largely positive, which supported company valuations and gave the stock markets a tailwind. The USA was ahead of the pack. Around four-fifths of the companies in the broad S&P 500 index reported higher sales and profits than the market consensus had expected. The US technology sector outperformed the other sectors in terms of sales growth, and the so-called "Magnificent 7", i.e. the technology giants, reported significantly higher earnings growth than the average US company.
On the bond markets, yields on high-quality government bonds rose due to the expected expansion of government debt on both sides of the Atlantic. At 2.70%, the yield on 10-year German government bonds was 9 basis points higher than in the previous month, while the yield on their US counterparts rose by 14 basis points to 4.37%. There were strong fluctuations during the month. These were mainly due to the ongoing uncertainty surrounding US tariff policy and the sustainability of US government debt (> USD 36 trillion). The gold price moved almost sideways over the course of the month, closing with a slight decline of -0.40% at USD 3,289.93 per troy ounce. By contrast, the US dollar appreciated by around 3% against the euro after a prolonged period of weakness. One euro was worth 1.14 US dollars at the end of the month.
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