Why Global ETFs Could Surge Amid U.S.-Japan Trade Deal

Group 1 - The recent trade breakthrough between the United States and Japan, reducing auto tariffs from 25% to 15%, is expected to boost global equities, particularly in the auto sector [1] - The Stoxx Europe Autos Index experienced a significant increase of 4.2% on July 23, 2025, with major Japanese automakers like Toyota, Honda, and Nissan seeing gains of 14%, 11%, and 8% respectively [2] - There is growing optimism for a potential trade agreement between the United States and the European Union, following the Japan deal, as markets anticipate similar tariff reductions [3][4] Group 2 - The Japan trade deal has raised expectations for a potential EU trade agreement, with analysts noting that Japan's tariff reduction sets a precedent for Europe [4] - Improved trade conditions are expected to enhance business confidence, with multinationals like SAP reporting delays in client decisions due to tariff pressures [5] - Lower tariffs and increased clarity in trade relations are anticipated to boost capital expenditure and cross-border investments, benefiting international industrial ETFs [6] Group 3 - U.S.-based ETFs, including SPDR S&P 500 ETF Trust and Invesco QQQ Trust, are positioned to gain from improved margins and renewed demand as American companies engage in global trade [7] - Broad global ETFs such as iShares MSCI World ETF and SPDR MSCI ACWI ex-US ETF provide diversified exposure to rising optimism across various regions, including Japan and Europe [8]