US-EU Trade Deal Sparks Divergent Market Reactions

The US-EU trade agreement, negotiated by President Donald Trump and European Commission President Ursula von der Leyen, imposes a 15% US tariff on most EU exports—higher than the rate for other recent trade partners and much greater than pre-trade war levels—while leaving US exports to the EU untaxed. The deal obligates the EU to invest over $600 billion in US energy and defense, raising concerns about risks to European exporters and economic damage within the EU. Following the announcement, US stock indices reached record highs, but European stocks and the euro declined, with the euro seeing its steepest one-day drop since May. European policymakers have faced backlash for what many consider an unfavorable compromise, as the agreement aims to reduce reliance on Russian energy. Bitcoin remained above $119,000, and its realized market capitalization exceeded $1 trillion for the first time, supported by institutional activity and the broader impact of the deal. The pact marks a significant shift in transatlantic trade relations, fueling divergent market reactions.