Key Takeaways
- The United States and European Union have reached a framework trade deal, with the EU agreeing to eliminate tariffs on all US industrial goods and the US set to implement a 15% tariff on major EU imports like cars and semiconductors.
- Federal Reserve official Schmid will closely monitor August and September inflation data, while former Fed President Bullard anticipates a September rate cut and potential for 100 basis points of cuts into 2026.
- Walmart (WMT) reported Q2 adjusted EPS of $0.68, missing estimates, but revenue reached $177.4 billion, exceeding expectations, with strong US comparable sales growth of 4.6%.
- Boeing (BA) shares jumped 2.6% on reports of ongoing negotiations to sell as many as 500 planes to China.
- UN nuclear officials are slated to visit the US for discussions on monitoring Iran's nuclear activities, amidst reports that Iran has not engaged on a "SnapBack" extension offer.
A significant framework trade deal has been agreed upon between the United States and the European Union, aiming to reshape transatlantic commerce. Under the agreement, the EU plans to eliminate tariffs on all U.S. industrial goods, while the U.S. intends to apply a 15% tariff on a range of major EU imports, including cars, pharmaceuticals, semiconductors, and lumber, effective September 1. This deal is expected to bring relief to various sectors, particularly the automotive industry, with senior U.S. officials anticipating tariff relief for EU automakers in "hopefully weeks." The digital sector was notably kept out of the current trade talks, though both sides pledged to tackle "unfair digital trade barriers" and the EU agreed not to introduce network usage fees. The EU also committed to substantial purchases of U.S. energy products, totaling $750 billion, and at least $40 billion in U.S. artificial intelligence chips.
In monetary policy news, Federal Reserve officials are closely watching upcoming economic data. Fed's Schmid stated that officials will monitor inflation data from August and September closely, maintaining that current policy is "modestly restrictive" and "appropriate for the time being." This cautious stance comes as inflation remains stubbornly above the Fed's 2% target. Meanwhile, former St. Louis Fed President James Bullard expressed optimism about the U.S. economy, highlighting deregulation as a key factor. Bullard anticipates a rate cut in September and suggested that the Fed could implement 100 basis points of cuts into 2026, depending on incoming data. He also mentioned discussions with Bessent regarding the Fed Chair job.
Retail giant Walmart (WMT) released its Q2 2025 earnings, reporting adjusted earnings per share of $0.68, which fell short of analyst estimates of $0.74. However, the company's revenue surpassed expectations, reaching $177.4 billion against an estimated $176.16 billion. Walmart's U.S. comparable sales saw a robust increase of 4.6%. Looking ahead, Walmart provided a Q3 adjusted EPS outlook of $0.58 to $0.60, exceeding estimates of $0.57, and projected Q3 net sales growth of 3.75% to 4.75% in constant currency. The company also maintained its fiscal year 2026 net sales growth outlook in the range of 3.75% to 4.75%.
Aerospace giant Boeing (BA) saw its shares climb 2.6% following reports that the company is in talks to sell as many as 500 planes to China. This potential deal signals a significant development for Boeing in the crucial Chinese market.
In geopolitical developments, UN nuclear officials are scheduled to visit the U.S. for discussions concerning the monitoring of Iran's nuclear activities. This comes amid reports indicating that Iran has not yet engaged with the E3 (France, Germany, and the UK) on a "SnapBack" extension offer, despite earlier comments suggesting otherwise.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.