We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Global ETFs Could Surge Amid U.S.-Japan Trade Deal
Read MoreHide Full Article
The recent trade breakthrough between the United States and Japan — slashing auto tariffs from 25% to 15% — could usher in a fresh rally in global equities, especially in the auto sector. There is a surge in optimism, which could be reflected in global equity-based exchange-traded funds (ETFs) with broad international exposure, particularly those weighted heavily in automakers, industrials and global exporters.
The Stoxx Europe Autos Index soared 4.2% on July 23, 2025, marking its best daily gain since February. Japanese auto giants like Toyota (+14%), Honda (+11%), and Nissan (+8%) also saw strong upward momentum, on the news of the deal.
Hope for EU Deal Fuels Optimism
Following the Japan deal, eyes have now turned to the European Union. Markets are increasingly pricing in the possibility of a similar trade agreement between the United States and EU, particularly after President Trump signaled that the European negotiations are imminent.
“The Japan deal has significantly raised hopes that the EU might also be able to reach a trade deal,” Deutsche Bank strategists noted, as quoted on CNBC. Citi economists highlighted that Japan secured the tariff reduction without an export cap, potentially setting a precedent for Europe.
If the United States agrees to reduce tariffs on EU auto exports to 15%, as it did for Japan, ETFs with exposure to European automakers like iShares Europe ETF (IEV - Free Report) or SPDR EURO STOXX 50 ETF (FEZ - Free Report) could see sizable inflows.
Improved Trade Backdrop Strengthens Business Confidence
Multinationals have faced prolonged uncertainty due to escalating tariffs. German software giant SAP revealed that U.S. tariff pressures were causing delays in client decisions, especially among industrials and manufacturers. But with signs that trade relations are normalizing, that phase of uncertainty is likely to recede.
Lower tariffs and greater clarity are expected to enhance capital expenditure, global supply chain flows, and cross-border investment, benefiting international industrial ETFs like the iShares Global Industrials ETF (EXI - Free Report) .
U.S. and Global ETFs Set for Momentum Shift
Along with ETFs on Europe and Asia, U.S.-based ETFs are also positioned to gain. Funds like SPDR S&P 500 ETF Trust (SPY - Free Report) and Invesco QQQ Trust (QQQ - Free Report) stand to benefit as American companies engaged in global trade see improved margins and renewed demand.
At the same time, broad global ETFs such as the iShares MSCI World ETF (URTH - Free Report) and SPDR MSCI ACWI ex-US ETF (CWI - Free Report) offer diversified exposure to rising optimism across multiple regions, including Japan, Europe, and other major trading partners now in the negotiation pipeline.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Global ETFs Could Surge Amid U.S.-Japan Trade Deal
The recent trade breakthrough between the United States and Japan — slashing auto tariffs from 25% to 15% — could usher in a fresh rally in global equities, especially in the auto sector. There is a surge in optimism, which could be reflected in global equity-based exchange-traded funds (ETFs) with broad international exposure, particularly those weighted heavily in automakers, industrials and global exporters.
The Stoxx Europe Autos Index soared 4.2% on July 23, 2025, marking its best daily gain since February. Japanese auto giants like Toyota (+14%), Honda (+11%), and Nissan (+8%) also saw strong upward momentum, on the news of the deal.
Hope for EU Deal Fuels Optimism
Following the Japan deal, eyes have now turned to the European Union. Markets are increasingly pricing in the possibility of a similar trade agreement between the United States and EU, particularly after President Trump signaled that the European negotiations are imminent.
“The Japan deal has significantly raised hopes that the EU might also be able to reach a trade deal,” Deutsche Bank strategists noted, as quoted on CNBC. Citi economists highlighted that Japan secured the tariff reduction without an export cap, potentially setting a precedent for Europe.
If the United States agrees to reduce tariffs on EU auto exports to 15%, as it did for Japan, ETFs with exposure to European automakers like iShares Europe ETF (IEV - Free Report) or SPDR EURO STOXX 50 ETF (FEZ - Free Report) could see sizable inflows.
Improved Trade Backdrop Strengthens Business Confidence
Multinationals have faced prolonged uncertainty due to escalating tariffs. German software giant SAP revealed that U.S. tariff pressures were causing delays in client decisions, especially among industrials and manufacturers. But with signs that trade relations are normalizing, that phase of uncertainty is likely to recede.
Lower tariffs and greater clarity are expected to enhance capital expenditure, global supply chain flows, and cross-border investment, benefiting international industrial ETFs like the iShares Global Industrials ETF (EXI - Free Report) .
U.S. and Global ETFs Set for Momentum Shift
Along with ETFs on Europe and Asia, U.S.-based ETFs are also positioned to gain. Funds like SPDR S&P 500 ETF Trust (SPY - Free Report) and Invesco QQQ Trust (QQQ - Free Report) stand to benefit as American companies engaged in global trade see improved margins and renewed demand.
At the same time, broad global ETFs such as the iShares MSCI World ETF (URTH - Free Report) and SPDR MSCI ACWI ex-US ETF (CWI - Free Report) offer diversified exposure to rising optimism across multiple regions, including Japan, Europe, and other major trading partners now in the negotiation pipeline.