Markets mixed as investors eye earnings and Trump tariffs ~ EconomyLens.com

London (AFP) – Global stocks diverged on Tuesday as traders awaited earnings from big US companies and European markets fretted over an August 1 deadline for the EU to avert steep tariffs from President Donald Trump. Wall Street’s Dow and S&P 500 indices rose amid a series of profit reports from General Motors, Tesla and others that promise clues to the impact of tariffs so far, following a record S&P finish Monday. European markets declined, as the August 1 date looms.

“European markets have been getting increasingly jittery as the deadline approaches,” said David Morrison, senior market analyst at Trade Nation. “With little sign of progress so far, investors are preparing for possible tariff retaliation from the EU.” US Treasury Secretary Scott Bessent said meanwhile he would meet his Chinese counterparts in Stockholm next week for tariff talks, as a separate mid-August deadline approaches for levies on China to snap back to steeper levels.

– Big earnings reports –

Closely-watched earnings loomed from some of the world’s biggest names, including Tesla, Google parent Alphabet, Intel and Coca-Cola. US auto giant General Motors reported a 35-percent plunge in second-quarter profits Tuesday following a $1.1-billion hit from US tariffs, but confirmed its full-year forecast. Its shares fell more than three percent in early trading.

Elsewhere, “expectations for the earnings season include accelerated profit growth for major US technology companies in the second half of the year,” said Jochen Stanzl, chief market analyst at CMC Markets. British pharmaceutical giant AstraZeneca said Tuesday it would invest $50 billion in the United States by 2030 amid Trump’s threats to impose tariffs on the sector. A weakened dollar has boosted US companies receiving payments in stronger currencies abroad — “a turbocharger” for their earnings, according to Stephen Innes, managing partner at SPI Asset Management.

Investment adviser Christopher Dembik at Pictet Asset Management said European companies reporting over coming days were conversely set to be hit by the effect of a stronger euro. Earlier in Asia, Hong Kong hit its highest close since late 2021. Its index has gained around 25 percent this year thanks to a rally in Chinese tech firms and a fresh flow of cash from mainland investors. Tokyo dipped following an earlier rally after the ruling coalition lost its upper-house majority as observers warned the government’s tenure remained fragile.

– Fed chief speech –

Traders were also looking ahead to a speech Tuesday by US Federal Reserve Chair Jerome Powell, ahead of the Fed’s monetary policy meeting on July 29 and 30, analyst Morrison said. Powell has come under pressure from Trump to quit, with the president angry at the Fed for not lowering interest rates in response to recent turbulence — but the central bank is expected to keep them on hold until September. Bessent said Tuesday he did not see a reason for Powell to resign “right now”.