Oil prices climbed 2% on Monday following a trade agreement between the U.S. and the European Union, alongside President Trump's announcement to shorten the deadline for Russia to end the war in Ukraine. Brent crude futures rose 2.34% to close at $70.04 a barrel, hitting a 10-day high after the peace deal deadline was reduced from 50 days to just 10-12 days. The EU trade pact sets a 15% U.S. import tariff on most goods and a $750 billion energy purchase commitment.
The S&P 500 ended Monday near the flatline as traders looked past the U.S.-EU trade deal toward upcoming catalysts like the Federal Reserve's rate decision. While the index hit a fresh record shortly after the opening bell, it closed with a marginal gain of 0.02% at 6,389.77. Tech stocks showed strength, but overall sentiment remained cautious ahead of a heavy week of economic data and corporate earnings.
Gold prices dropped to their lowest level since July 9th as the U.S.-EU trade accord boosted the dollar and reduced safe-haven demand. Spot gold fell 0.6% to $3,316.03 per ounce. The move reflected increased risk appetite among investors who are also awaiting fresh cues on interest rate policy from the Federal Reserve's two-day meeting.
U.S. Treasury yields climbed on Monday as investors anticipated the Federal Reserve's policy announcement and key inflation data. The 10-year Treasury yield rose to 4.416%, while the 2-year yield also edged higher. Markets are currently pricing in a high probability of a rate cut, though the timing remains a focus of intense debate among market participants.
President Trump has dramatically shortened the deadline for Russia to reach a peace agreement with Ukraine, giving Moscow approximately 10-12 days to comply or face severe "secondary tariffs." Failure to meet this window will trigger massive duties on Russia's trade partners and additional sanctions. Trump stated that the framework for this policy is final and an official announcement is imminent.