S&P 500 ended flat Monday as traders ignored the new EU-U.S. trade deal

The S&P 500 closed Monday basically unchanged at 6,389.77, up just 0.02%, as U.S. traders ignored the new trade agreement between the Trump administration and the European Union and instead focused on a week stacked with bigger market drivers.

According to data from CNBC, the index touched a new all-time high right after the open but barely moved afterward, peaking just 0.2% above the flatline.

The Dow Jones Industrial Average dropped 64.36 points to 44,837.56, while the Nasdaq Composite gained 0.33% and ended the day at 21,178.58, also reaching a record earlier in the session.

The new deal between the U.S. and the EU, announced Sunday by President Donald Trump, reduces tariffs to 15% for trading partners that have signed bilateral deals. The move avoids the previously threatened 30% import taxes.

Trump said on Monday that any nation not renegotiating terms with the U.S. will likely face tariffs between 15% and 20%, calling this the new global baseline.

But despite the announcement, market reaction was muted. Traders showed little enthusiasm for the deal and instead kept their eyes on upcoming data releases, the Federal Reserve’s policy decision, and earnings from major tech companies.

Wall Street watches earnings, Fed meeting, and job numbers

More than 150 companies in the S&P 500 are set to report quarterly earnings this week, making it the busiest stretch of the season so far. On Wednesday, Meta and Microsoft are expected to post results, followed by Amazon and Apple on Thursday.

Traders are especially watching for commentary on AI-related spending, looking for signs that the capital poured into infrastructure and cloud services this year has been worth it.

Meanwhile, the Federal Reserve began its two-day meeting Tuesday, with an announcement due Wednesday. The market widely expects the central bank to hold interest rates at the current 4.25% to 4.5% target range.

But investors are hoping for signals on whether Chair Jerome Powell is open to a rate cut in September, especially as inflation pressures have eased and labor data have started to cool.

That brings attention to Friday’s U.S. jobs report, where expectations are for 102,000 jobs added in July, a slowdown from June’s 147,000. Traders are treating that data point as a key indicator for where the economy might be headed next, especially as wage growth and participation rates have started leveling off.

Also on Friday is Trump’s deadline for countries to begin applying the newly announced tariffs, raising pressure on global partners who haven’t yet come to terms with the U.S.

Back in the U.S., Oppenheimer returned to its bullish stance on the S&P 500, raising its 2025 year-end price target to 7,100, up from a previously slashed estimate of 5,950. That implies an 11.1% gain from last Friday’s close.

John Stoltzfus, the firm’s chief strategist, explained that Oppenheimer initially trimmed its forecast after Trump announced the now-paused reciprocal tariff plan back in April.

“After the April 2 announcements this year of tariff regimes by the President, which in our view appeared to be much higher than we and many others had anticipated, we reduced our year-end target to 5,950…” he said. The firm now believes that the market can absorb the current trade outlook and still move higher by year’s end.

Europe reacts with anger as the euro drops and stocks fall

The EU side of the deal didn’t go down well. The euro fell over 1% against the U.S. dollar, its sharpest one-day decline since May, and weakened 0.8% against the British pound.

Despite Monday’s drop, the currency is still up 12% for the year, helped by investor confidence in Germany’s defense spending and bets that Trump’s America First approach will end up pushing Europe to boost its own economy.

But officials in Germany and France weren’t celebrating. German Chancellor Friedrich Merz said the new tariffs would cause “considerable damage” to Germany, Europe, and the U.S. as well.

“Not only will there be a higher inflation rate, but it will also affect transatlantic trade overall,” Friedrich said Monday. “This result cannot satisfy us. But it was the best result achievable in a given situation.”

French Prime Minister François Bayrou was more direct, calling it a “dark day” for Europe. He said the EU had “resigned itself into submission.” European markets also pulled back after opening stronger on hopes of a more favorable deal.

The DAX in Germany ended down 1.1%, France’s CAC 40 dropped 0.4%, and the Stoxx Europe 600 auto sector, heavily exposed to tariffs, fell 1.8%, reversing early gains from Monday’s open.

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