US stocks strengthened last week as investors await the outcome of president Donald Trump’s negotiations with trade partners ahead of the approaching tariff deadline. Several tariffs were postponed, but they are expected to come into effect again on July 9.

US stocks react to tariff tensions

According to data from TradingView, the Dow Jones index rose 3% over five days to 44,094.77 points, Nasdaq gained 2.83% to 20,369.73 points, and the S&P 500 improved by 2.37% to 6,204.95 points. Investors were encouraged especially by Canada’s decision to cancel a planned tax on American tech companies and to resume trade talks. Trump had previously suspended these negotiations, calling the tax a direct and open attack on the country, reported Euronews.

At the time of writing, the S&P 500 is trading at 6,198 points, very close to its all-time high of 6,215 points. This surpassed the previous level from mid-February and also erased the March correction. The market thus gains room for a continuation of the long-term upward trend, but several risks remain.

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Possible risks for the stock markets:

• Implementation of new tariffs: Uncertainty around Trump’s decisions may cause a decline in trade activity.
• Inflation and high interest rates: Higher rates reduce the attractiveness of stocks compared to bonds.
• Weak economic data: Negative figures from the labor market or industry may weaken investor confidence.
• Geopolitical tension: Conflicts or tensions can increase volatility and capital outflows from stocks.
• Overvaluation: Some sectors are overpriced, risking a price correction.

European markets are somewhat more stable

The European Union is trying to avoid the planned 50% tariff. Instead, it may accept a 10% base rate on several export goods, but demands exemptions for products such as alcohol and automobiles.

On European markets, Germany’s DAX was stable, France’s CAC 40 fell by 0.16%, while the UK’s FTSE 100 rose by 0.22%. Japan’s Nikkei 225 dropped by 1.05%, but South Korea’s Kospi increased by the same percentage. Brent crude oil prices fell by 0.42% to 66.46 dollars per barrel, and WTI by 0.4% to 64.85 dollars.