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July 21, 2025 – 09:32

(Bloomberg) — US stock futures climbed ahead of a busy earnings week that will include results from Tesla Inc. and Alphabet Inc. The yen strengthened as Japan’s Prime Minister vowed to stay in power even after election defeat.

Contracts on the S&P 500 ticked up 0.2% while Europe’s equities benchmark opened little changed as uncertainty over trade tariffs between the European Union and the US stayed elevated. Japan’s currency strengthened as much as 0.7% against the dollar, before paring some of the advance. 

The yen had dropped for two weeks and bond yields spiked ahead of the vote on concern a poor showing by Prime Minister Shigeru Ishiba would open the door to more spending and tax cuts. While the ruling Liberal Democratic Party and its partner lost their majority in the chamber, their final tally may be enough to keep Ishiba in the job.

“Some investors had positioned for a larger setback for the coalition and even anticipated Ishiba’s resignation,” said Akira Moroga, chief market strategist at Aozora Bank. “The unwinding of such positions, combined with relief that a political risk event has passed, contributed to the initial yen rebound.”

In Europe, EU envoys are set to meet as early as this week to formulate a plan for measures to respond to a possible no-deal scenario with President Donald Trump, whose tariff negotiating position is seen to have stiffened ahead of an Aug. 1 deadline. 

Corporate Highlights:

Stellantis NV recorded a €2.3 billion ($2.7 billion) net loss in the first half as restructuring expenses, waning sales and the impact of US tariffs hit the struggling automaker.Ryanair Holdings Plc net income in the first quarter more than doubled, and the budget airline said it will recover most of the fare drop suffered last year to achieve “reasonable” profit growth in fiscal 2026.

Trump also said he’s nearing an announcement on a couple of “big” trade deals.

Yields on 10-year Treasuries dropped two basis points, declining for a fourth session. A gauge of dollar strength slipped 0.2%. 

The president pushed back on a report that Treasury Secretary Scott Bessent advised that markets would react badly if he fired Federal Reserve Chair Jerome Powell. 

Powell’s removal as Fed Chair remains unlikely, and even in such a scenario, it is hard to see the other governors voting for cuts if the economic backdrop didn’t warrant them, Barclays strategists including Themistoklis Fiotakis wrote in a note to clients. 

Trump Threats Send Wall Street Hunting for Perfect Powell Hedge

Staying On

Back in Japan, Ishiba said he intends to stay on despite the defeat. Traders are focused on how the political uncertainty may play out as this is the first time since 1955 that a leader from the storied Japanese party will govern the country without a majority in at least one of the legislative bodies. 

Japanese stock futures edged lower.

“Uncertainty usually tends to favor the yen, at least initially,” said Rodrigo Catril, a currency strategist at National Australia Bank in Sydney. “Overall, the election outcome is not good news for Japanese assets and we would look to fade yen strength.” 

The election results dent Japan’s appeal to global investors, at least in the short term, said Dilin Wu, a research strategist at Pepperstone Group Ltd. 

“As investors digest the political ramifications, risk appetite could fade further,” she said.

Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 8:21 a.m. London timeS&P 500 futures rose 0.3%Nasdaq 100 futures rose 0.3%Futures on the Dow Jones Industrial Average rose 0.3%The MSCI Asia Pacific Index was little changedThe MSCI Emerging Markets Index rose 0.2%

Currencies

The Bloomberg Dollar Spot Index fell 0.2%The euro rose 0.1% to $1.1641The Japanese yen rose 0.4% to 148.19 per dollarThe offshore yuan was little changed at 7.1782 per dollarThe British pound rose 0.2% to $1.3440

Cryptocurrencies

Bitcoin rose 1.1% to $119,485.06Ether rose 1.4% to $3,794.05

Bonds

The yield on 10-year Treasuries declined three basis points to 4.39%Germany’s 10-year yield declined four basis points to 2.65%Britain’s 10-year yield declined three basis points to 4.64%

Commodities

Brent crude fell 0.2% to $69.15 a barrelSpot gold rose 0.5% to $3,366.20 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Issei Hazama, Alice French, Winnie Hsu and Matthew Burgess.

©2025 Bloomberg L.P.