U.S. president Donald Trump ultimately pushed his trade deal through the old Europe's resistance. The big announcement of the tariff framework agreement from Turnberry, Scotland on July 27 after his round of golf with the European Commission's president Ursula von der Leyen had a very positive effect on the further development of the Wall Street stock rally. It is clear because together the EU and the U.S. form a market of 800 million people to cover nearly 44% of the global gross domestic product (GDP). $600 billion of the $3.3 trillion in goods imported by the U.S. in 2024 came from the EU.

The S&P 500 broad barometer beat its all-time record moving above 6,420 points, while this record-breaking run immediately led the EU Stoxx 600 index to its 4-month high at 555 points. The optimistic upside gap and an extra move later proved to be, of course, somewhat hasty, or one may truly call it premature, causing an almost equally fast downward corrective pullback long before the closing bell of all trading sessions on Monday, July 28. However, a fresh impressive jump to new heights certainly points to the further trajectory for the composite indices in both America and Europe. Although to a greater extent, bullish efforts can now be expected on the U.S. side of the Atlantic since the agreement looks an order of magnitude more favourable for Washington dwellers, and Brussels seems to have been forced just to accept the conditions with the least damage before Trump's August 1 deadline. So, it could be considered a great success that Germany's DAX 40 lost only just over 1% by the end of Monday, while France's CAC 40 and the UK's FTSE 100 ended the day 0.43% lower than last Friday.

With some exceptions like steel, the deal includes a 15% tariff on EU goods entering the U.S. but zero levies for imported U.S. goods when coming to Europe. This is understandable, since it would be simply impossible to cover the ever-growing trade deficit in favour of Europe, which is driving the U.S. into soaring debt. For this solid reason, Trump could never agree to a better deal for Europe. That's also why the EU committed to purchasing $750 billion worth of various energy resources from the U.S., and to make $600 billion in investments in America. This also follows Trump's generally agreed deal with Japan, which cut tariffs on U.S. auto imports and other goods with a $550 billion package of Japan's U.S.-bound investment and loans.

As strange as it might seem to some, we considered the EU and U.S. trade disputes to transform potentially into the most controversial point, most difficult to overcome in the tangle of all the trade talks with other countries. Here, all those newly emerged political contradictions between essentially former ideological allies still stood at the forefront. For us, this means that global trade wars have now passed a real turning point, with no return to confrontational trends that became so much visible in the beginning of spring. Wall Street was already standing like an unbreakable rock while multiple uncertainties persisted, even despite trade headwinds or sometimes stormy weather. Bulls clearly outnumbered bears climbing each time higher. We estimated that the S&P500 has recently set as much as 25 consecutive sessions when it has not fallen more than 1% intraday, while closing most of those days in positive territory. Now, when most parts of the problem are nearly solved and notable framework trade deals have been accomplished, the stock investment business should do even better.

Since tariff threats' elimination is not the only bullish driver for Wall Street, a moderate pullback from new historical peaks is quite natural and probably very short-lived. Major funds and banking institutions are already updating their forecasts in their most optimistic mood. Equity strategist Michael Wilson at Morgan Stanley figures the S&P 500 could rally to 7,200 by mid-2026, due to a “rolling recovery” in earnings and supportive macro trends, pointing to "mid-teens" growth estimates for EPS (equity per share). As another good example, Oppenheimer has already raised its year-end estimates to 7,100 in S&P 500 terms. The analyst house had previously lowered its projection to as low as 5,950 points in early April but now see a clearer path for gains. “With the announcement of trade deals by President Trump and his administration … we believe that enough ‘tariff hurdles’ have been overcome for now to reinstate our original price target for the S&P 500 of 7,100 by year-end,” Oppenheimer noted.

When mentioning the resilience of the U.S. economy and the Fed’s progress in pushing inflation down from 9% in June 2022 to 2.7% last month “without thus far causing a recession”, they are feeling important for investors to seek out "babies that get tossed out with the bathwater’ in market downdrafts”, probably meaning some underestimated quality assets. “Corporate revenue and particularly earnings growth for Q4 and Q1 for firms in the S&P 500 surprised well to the upside,” analysts added. 84% of S&P 500 companies manage to exceed consensus estimates” for Q2. “Magnificent Seven” firms, including Facebook and Instagram owner Meta Platforms (META) and Microsoft (MSFT) will report on Wednesday night, Apple (AAPL) and Amazon (AMZN) will follow them the next evening after the regular market's close. It will most likely be possible to make good money right from trading in after-hours on these reporting Wall Street nights.