In early European trading, Eurostoxx and DAX futures increased, while FTSE futures stayed the same.
by VT Markets
/
Aug 7, 2025
European stocks are continuing to rise, with Eurostoxx futures up by 0.5% in early trading. German DAX futures have grown by 0.6%, while UK FTSE futures are steady.
Even with Trump’s threat of tariffs on China, market sentiment remains strong. The US is facing challenges due to China’s limits on rare earth exports. Trump’s cautious approach to the trade situation is supported by Navarro’s comments, which downplayed the issue. US futures are looking positive, with S&P 500 futures up 0.3%, showing a steady recovery on Wall Street.
Historical Market Concerns
Reflecting on past market moods, we recall how much they relied on tariff threats and changes in tone. The notion of a “trade truce” between the US and China created short-term chances for buying stocks. Traders who acted quickly on news from officials were rewarded.
Today, the situation for European derivatives is much different. The previous optimism in Eurostoxx and the DAX faces the challenge of persistent core inflation, now at 2.8% in the Eurozone. Additionally, German industrial production fell by 0.5% in the second quarter of 2025. Traders may want to consider buying protective puts on the DAX to shield against possible losses in the coming weeks.
In the US, discussions have moved past simple trade issues. We’re now looking at the Federal Reserve’s plans, especially after the latest jobs report, which added 190,000 jobs but indicates a slowdown from the rapid growth in early 2024. With the CBOE Volatility Index (VIX) low at around 14, buying VIX call options could be an affordable way to protect portfolios against any unexpected moves from the central bank.
Changing Dynamics of the US-China Conflict
The US-China conflict has evolved from mere tariff threats to a deeper competition over essential technologies, affecting supply chains. A more strategic approach is needed now, like using options to create pair trades that short semiconductor ETFs while investing in domestic industrial sector funds.
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by VT Markets
Aug 7, 2025
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