The surge in German auto stocks can be attributed to the optimistic outlook surrounding a U.S.-Japan trade deal that has significant implications for global automotive markets. The agreement, which reduces tariffs on Japanese automobiles from a proposed 25% to 15%, has not only invigorated investor sentiment in Japan—evidenced by the Nikkei's impressive rise of 3.7% (Nikkei, 2025)—but also sparked hopes for similar negotiations between the European Union and the United States. As tariffs are anticipated to lower, European automakers stand to benefit from increased competitiveness in the U.S. market.
Futures linked to the broad market index were up 0.24%, while Dow Jones Industrial Average futures added 133 points, or 0.3%. Nasdaq 100 futures were up 0.1%.
Trump said in a Truth Social post Tuesday night that the U.S. had completed a “massive Deal” with Japan. The agreement includes “reciprocal” tariffs of 15% on the nation’s exports to the U.S.
Those moves follow a second straight day concluding at a high for the S&P 500, which inched up 0.06% in the session. Tuesday marked the 11th closing record of 2025 for the benchmark index. The 30-stock Dow climbed nearly 180 points in the session. The tech-heavy Nasdaq Composite, on the other hand, fell about 0.4% as chip stocks took a hit.
Japanese Prime Minister Shigeru Ishiba welcomed the trade agreement, saying it marks “the lowest figure among countries that have a trade surplus with the U.S.,” according to Reuters.
Germany’s Volkswagen, BMW and Mercedes-Benz Group were all up more than 4% on the news, while luxury automaker Porsche soared 7.4%.
Milan-listed shares of Jeep maker Stellantis was also up around 6%.
The gains followed a sharp upswing for Japanese autos stocks. Toyota surged over 14%, with domestic peers Honda and Nissan up 11% and 8%, respectively.
This positive momentum was further reinforced as shares of major Japanese automakers like Toyota and Honda experienced substantial gains, with Toyota's stock rising by over 14% . Such developments indicate a ripple effect across international markets, as investors speculate that improved trade relations could lead to a more favorable environment for German automobile manufacturers. Consequently, this optimism is reflected in rising stock prices within Germany's automotive sector.
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