• Euro STOXX extends losses, last down 0.6%
• Wall Street set to open flat
• Earnings season, tariffs in focus
• Japan's Nikkei rises in relief rally after priced-in election
• US dollar subdued as investors await tariff clarity

LONDON, July 22 (Reuters) - European shares fell on Tuesday, hit by mixed corporate earnings and anxiety over tariff negotiations between the U.S. and its trading partners, while the euro held steady.

The Euro STOXX 600 index (.STOXX) , opens new tab extended losses during morning trading and was last down 0.6%, with bourses in Germany (.GDAXI) , opens new tab and France (.FCHI) , opens new tab losing 1.1% and 0.8% respectively.

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Among the big decliners were chemical stocks (.SX4P) , opens new tab which shed 2% as Dulux paint maker Akzo Nobel (AKZO.AS) , opens new tab lost 5.4% after lowering its core profit outlook for 2025. Earnings from firms including SAP (SAPG.DE) , opens new tab and UniCredit (CRDI.MI) , opens new tab were also in focus.

Investors were also following tariff talks ahead of Washington's August 1 deadline, with the European Union exploring a broader set of possible countermeasures against the U.S. as hopes for an acceptable agreement fade.

The euro was steady at $1.1689 after rising 0.5% on Monday, though still away from the near four-year high hit at the start of the month.

The single currency is up 13% this year as investors looked for alternatives to U.S. assets bruised by tariff uncertainties. Its performance is closely monitored for its impact on profits in the euro zone's export-reliant economy.

"The euro's ability to maintain preference over the dollar amid tariff tensions will depend on the extent of any escalation and whether the EU emerges as a relative loser while other countries secure significant deals with the U.S.," ING analysts wrote in a note to clients.

Wall Street futures were marginally down. The benchmark S&P 500 (.SPX) , opens new tab and the Nasdaq (.IXIC) , opens new tab closed at record highs on Monday.

Investors await results this week from Wall Street giants Alphabet and Tesla (TSLA.O) , opens new tab, as well as European heavyweights LVMH (LVMH.PA) , opens new tab and Roche (ROG.S) , opens new tab, as uncertainty over tariffs clouds the outlook.

Earlier, Asian share markets drifted lower after scaling a near four-year peak.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab hit its highest since October 2021 but finished down 0.4%. The index is up nearly 16% this year.

Japanese markets returned after a holiday on Monday following the weekend's election where the ruling coalition suffered a defeat in upper house elections, although Prime Minister Shigeru Ishiba vowed to remain in his post.

The yen rallied 1% on Monday, recouping some of the losses from past weeks and was flat at 147.43 per dollar.

FED INDEPENDENCE

The dollar index , which gauges the unit against six other key currencies, was also flat at 97.849.

Rumblings around the Federal Reserve's independence and whether U.S. President Donald Trump will fire Fed Chair Jerome Powell have kept investors on tenterhooks in recent weeks.

U.S. Treasury Secretary Scott Bessent said on Monday the entire Federal Reserve needed to be examined as an institution and whether it had been successful.

The Fed is widely expected to hold rates steady in its July meeting but might lower rates later in the year. Market focus will be squarely on Powell's impending speech on Tuesday for clues about when the Fed might ease policy.

Brent crude futures fell 0.9% to $68.56 a barrel, while U.S. West Texas Intermediate crude slipped by the same amount to $66.59 per barrel.

https://www.reuters.com/world/china/global-markets-wrapup-4-2025-07-22/