The U.S. and Japan have struck a trade agreement, President Trump said in a social-media post Tuesday evening, saying he would set his so-called reciprocal tariffs at 15% for the country. Under the deal, Japan will invest $550 billion into the U.S., Trump said in his post on Truth Social, writing the U.S. would receive "90% of the Profits" from the investments, without providing further details. Japan will also "open their Country to Trade including Cars and Trucks, Rice and certain other Agricultural Products," Trump posted. The Trump administration is using its global trade wars to advance the interests of the U.S. technology industry, seeking to prevent foreign countries from targeting American internet firms. The administration hopes to use the threat of tariffs and access to the U.S. economy to stop multiple countries from imposing new taxes, regulations and tariffs on American tech companies and their products ahead of a self-imposed Aug. 1 deadline, when higher levies are scheduled to take effect for dozens of trading partners.

On Tuesday, the SMI shed 0.4 per cent to 11,894 points. Of the 21 SMI stocks, 15 lost ground and five advanced, while Sonova shares closed unchanged. A total of 18.91 (previously: 17.1) million shares were traded. Givaudan shares led the decliners in the SMI with a loss of 5.5 per cent. The fragrance and flavour manufacturer had once again increased its sales in the first half of the year. There were no signs of the US trade conflict, and profitability in particular had grown more strongly than hoped, according to the company. However, UBS criticised the fact that organic sales growth in the second quarter had fallen short of expectations. The decline in the SMI was slowed by heavyweights Nestlé (+0.7%) and Novartis (+0.7%). Swisscom shares (+0.7%) and UBS shares (+0.6%), which are also considered defensive, bucked the negative trend. Richemont (+0.1%) stabilised after several days of decline. Amont small caps, Julius Bär and Lindt & Sprüngli reported on their business performance in the first half of the year. Higher cocoa prices did not affect the figures of the chocolate group Lindt & Sprüngli (-6.4%), as these were more than offset by efficiency measures and price increases. However, the outlook was disappointing. At Julius Bär (-2.1%), profits declined slightly more than expected, and adjusted pre-tax profits were also marginally below consensus. However, this was offset by surprisingly high net inflows in asset management.

Europe
The European stock market closed with losses on Tuesday. The Stoxx Europe 600 index fell 0.4% to 544.3 points. In Paris, the CAC 40 and SBF 120 each slipped 0.7%. The DAX 40 dropped 1.1% in Frankfurt, while the FTSE 100 gained 0.1% in London. NXP Semiconductor's financial results caused concern in the technology sector. Infineon dropped 3.5 per cent. Technology stocks were down 1.6 per cent. Akzo Nobel (-3.4%) downgraded its profit outlook for the full year to account for currency effects, according to Jefferies. These also weighed on second-quarter results. Both divisions of the Dutch paint company performed weaker than Jefferies had expected, as exchange rate fluctuations had a greater impact than anticipated. Bucking the weak overall market, Norsk Hydro shares climbed 2.7 per cent. The Norwegian aluminium manufacturer benefited more than expected from rising raw material and energy prices in the second quarter. Adjusted EBITDA increased by almost 33 per cent year-on-year. Cost control remains tight, with a hiring freeze now also announced.

United States
The S&P 500 ticked up to a new high after President Trump announced trade deals with the Philippines and Indonesia and his Treasury secretary offered support to embattled Federal Reserve Chair Jerome Powell. The broad index advanced 0.1% to 6309.62. The Dow Jones Industrial Average rose 179 points, or 0.4%, to 44502.44. The technology-heavy Nasdaq Composite Index fell 0.4% to 20892.68, retreating from the record it reached on Monday, weighed down by a decline in tech stocks such as Nvidia. Investors hope the trade pacts with the Philippines and Indonesia, which Trump announced in Truth Social posts on Tuesday afternoon, will be followed by further deals. Investors digested a slew of fresh earnings reports on Tuesday, some of which suggested that Trump’s tariffs are beginning to bite into corporate profits. General Motors tumbled 8.1% after the automaker reported that new tariffs on imported cars and auto parts took a $1.1 billion bite out of its bottom line. RTX fell 1.6% after the aerospace and defense company lowered its earnings forecast, citing tariffs. Another big name in aerospace, Lockheed Martin, slid 11% after its second-quarter profit was hit by more than $1.7 billion in special charges, making it the worst-performing stock in the S&P 500 on Tuesday. Home builders were among the index’s best performers. D.R. Horton and PulteGroup jumped 17% and 12%, respectively, after both companies beat analysts’ forecasts for quarterly earnings amid a difficult environment for the housing markets, which has slowed due to high mortgage rates. In one of Tuesday’s wilder stock moves, Kohl’s shares soared 38% as the retailer became a sudden favorite of meme-stock investors. Users of the WallStreetBets forum on Reddit drew attention to the high level of short-seller bets against the retailer’s stock. Gold futures advanced 1.1% to a record high of $3,439.20 per troy ounce, boosted by a weaker dollar.

Asia
Japanese stocks rose early Wednesday, leading gains in the Asia-Pacific region, after the U.S. and Japan reached a trade agreement that eased economic uncertainty related to U.S. tariffs. The Nikkei-225 clearly leads the winners' list in the region with a gain of 3.3 per cent. Car stocks on the Tokyo stock market are booming. Mazda Motor shares rose by 17.8 per cent, Toyota Motor climbed by 16 per cent and Mitsubishi Motors improved by 12.8 per cent. However, stocks from other sectors are also on the rise. Sony shares gained 4.8 per cent and Tokyo Electron advanced by 1.6 per cent. The other Asian stock markets are moving upwards as well, albeit at a much more moderate pace. The Shanghai Composite advanced by 0.7 per cent and the Hang Seng Index improved by 1.1 per cent. In Australia, the S&P/ASX 200 added 0.7 per cent.

Bonds
Long-dated U.S. government debt yields slipped on Tuesday. The 10-year Treasury note yield edged back 2 basis points to 4.34%, while the 2-year Treasury note yield remained virtually unchanged at 3.84% - amid continuing debate around the Fed's independence and as trade deals start to emerge.

Analysis
Target price Belimo: UBS upgrades to CHF 586 (510) - Sell
Target price Swatch: Citigroup downgrades to CHF 143 (147) - Neutral
Target price Novartis: UBS cuts to CHF 95 (104) - Neutral