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In New York, the Dow Jones industrial average was down 64.36 points at 44,837.56. The S&P 500 index was up 1.13 points at 6,389.77, while the Nasdaq composite was up 70.27 points at 21,178.58.

The markets felt some relief in response to the trade agreement between the U.S. and European Union announced Sunday, said Kathrin Forrest, equity investment director at Capital Group.

That deal imposes a 15 per cent tariff on most goods imported into the U.S., with no agreement on key areas like pharmaceuticals and steel.

It wards off U.S. President Donald Trump’s threat of a 30 per cent rate if no deal had been reached by Aug. 1. While the tariffs could raise prices for U.S. consumers and slow growth in both the U.S. and Europe, the deal appears to lessen the chance of further escalation of trade tensions.

“If you take a step back, I would say that it reinforces the U.S. administration's use of tariffs as a tool to achieve a number of objectives, including revenue generation,� said Forrest.

“Overall, the benchmark in terms of expectations was set very, very low around the Liberation Day tariff threats in early April," she said, adding that some of the tariff agreements we're seeing now appear to avert some of those worst cases.

Canada has its own trade tensions with the U.S. to sort out, and an announcement could come as early as this week.

The two countries set an Aug. 1 deadline to reach a deal through negotiations, with Trump threatening to impose a 35 per cent tariff on goods imported from Canada if a new agreement isn’t yet in place.

However, markets will be watching key economic news that’s still to come before that deadline.

The Bank of Canada is set to announce its latest interest rate decision and monetary policy report on Wednesday. The central bank held its key rate at 2.75 per cent in April and June and economists broadly expect the bank will continue its holding pattern.

In the U.S., the Federal Reserve is expected to release its next interest rate decision the same day.

Forrest said the Canadian central bank’s direction is likely to be informed, in part, by the looming deadline on Friday.

“If both the Fed and the Bank of Canada stay put … I wouldn't expect a meaningful market response,� she said.

“One interesting area to watch is just how each governor describes prospects for the future path of policy rates.�

The Canadian dollar traded for 72.87 cents US compared with 72.97 cents US on Friday. 

The September crude oil contract was up US$1.55 at US$66.71 per barrel. 

The August gold contract was down US$25.60 at US$3,310.00 an ounce.

— With files from The Associated Press

This report by °µÍø½ûÇø was first published July 28, 2025.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)