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London stocks rose in early trade on Wednesday following heavy losses in the previous session, but gains were muted as Trump’s tariff chaos rumbled on.
At 0820 GMT, the FTSE 100 was up 0.2% at 8,512.46.
Overnight, US President Trump’s 25% tariffs on steel and aluminium came into effect globally. The European Union responded by saying that it would impose counter tariffs on €26bn of US goods starting next month.
Meanwhile, Trump rowed back on his decision to double tariffs on Canadian steel and aluminium imports to 50%, just hours after making the announcement. This came after the province of Ontario suspended new charges of 25% on electricity that it sends to some northern states in the US.
US tariffs of 25% will still take effect from 12 March, however.
The UK has not followed with retaliatory tariffs but said it was reserving the right to retaliate, with the Business Secretary saying that “all options” are on the table.
Investors were also mulling news that Ukraine has agreed to a US-proposed 30-day ceasefire with Russia.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘”As the ‘Trump bump’ has turned into a slump, investors are bracing for fresh volatility ahead. The impact of tariffs is front of mind, given broad 25% duties on imports of steel and aluminium have come into effect, with the risk of tit-for-tat retaliation high. China has already responded with higher duties on American goods and the EU is planning counter tariffs, which are expected to come into force in April. The disquiet evident among investors on Wall Street, spread to Asia, with the Nikkei flat and Chinese indices in the red.
“London’s FTSE 100 is set for a small rebound, buoyed by hopes for a ceasefire in Ukraine. The easing of geopolitical concerns will help improve sentiment to some extent, but investors will still be mulling the impact of tariffs on global growth and prospects for multinationals in an increasingly complex trading world. UK steel exporters are bracing for harsh winds to blow a storm through the industry, which has already been battered by higher energy costs, weaker demand, and over-supply on world markets.”
Looking ahead to the rest of the day, all eyes will be on the latest US inflation reading, with the consumer price index for February due at 1230 GMT.
“Although the CPI headline rate is expected to moderate a little from 3% to 2.9% for February, prices pressures remain high,” Streeter said.
In equity markets, Hill & Smith surged as the construction and infrastructure products firm hiked its annual dividend by 14% after seeing underlying profits rise by almost a fifth in 2024.
Hochschild Mining shone as the gold miner hailed its best financial performance for 13 years.
Infrastructure construction specialist Balfour Beatty edged up as it posted an 11% rise in underlying annual earnings and said it would buy back £125m in shares this year.
Financial services group Legal & General fell despite saying it will buy back £500m of shares this year after a strong financial performance in 2024, as part of plans to return more than £5bn to shareholders within three years – equal to around 40% of its market capitalisation.
Core operating profits were up 6% last year at £1.62bn, with a decline in asset management profits outweighed by growth in the retail and institutional retirement divisions.
4imprint tumbled as the direct marketer of promotional products posted a rise in full-year profits and revenues but struck a cautious note on the outlook.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Melrose Industries Plc | +8.34% | +40.60 | 527.20 |
| 2 |  |
Crh Plc | +3.79% | +272.00 | 7,440.00 |
| 3 |  |
Fresnillo | +3.63% | +31.00 | 885.00 |
| 4 |  |
Anglo American Plc | +2.63% | +59.00 | 2,304.00 |
| 5 |  |
Standard Chartered Plc | +2.21% | +25.00 | 1,155.50 |
| 6 |  |
Gen.acc.8se.pf | +2.19% | +3.25 | 151.75 |
| 7 |  |
Rolls-royce | +2.11% | +15.80 | 763.20 |
| 8 |  |
Barclays | +2.06% | +5.85 | 289.40 |
| 9 |  |
Natwest | +1.89% | +8.20 | 441.30 |
| 10 |  |
Informa Plc | +1.82% | +13.60 | 760.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
International Consolidated Airlines Group S.a. | -3.70% | -10.80 | 280.70 |
| 2 |  |
Associated British Foods Plc | -3.11% | -60.00 | 1,871.00 |
| 3 |  |
Legal & General Group Plc | -1.80% | -4.40 | 240.50 |
| 4 |  |
Bt Group Plc | -1.73% | -2.70 | 153.60 |
| 5 |  |
Ferguson Enterprises Inc. | -1.55% | -190.00 | 12,090.00 |
| 6 |  |
Bae Systems Plc | -1.52% | -24.00 | 1,551.50 |
| 7 |  |
Smith & Nephew Plc | -1.49% | -17.00 | 1,124.00 |
| 8 |  |
Barratt Redrow Plc | -1.29% | -5.60 | 429.30 |
| 9 |  |
Next Plc | -1.28% | -126.00 | 9,682.00 |
| 10 |  |
Sainsbury (j) Plc | -1.24% | -3.20 | 255.00 |
US close: Uncertainty rattles markets as hectic tariff campaign continues
A step-up in protectionist threats between Canada and the US prompted another negative session on Wall Street on Tuesday, with all three benchmark indices hitting six-month lows.
Also weighing on sentiment was a small business confidence survey which fell to a four-month low, and Citi’s downgrade of US equities to ‘neutral’.
The Dow slumped 1.1% to 41,433.48 with just four constituents in positive territory, while the S&P 500 fell 0.8% to 5,572.07 and the Nasdaq slipped 0.2% to 17,436.10. All three benchmarks were trading at levels not seen since early-September.
That followed a mass sell-off on Monday, which saw the Dow, S&P 500 and Nasdaq drop 2.1%, 2.7% and 4.0%, respectively, after Donald Trump refused to rule out a recession this year due to the economic impact of his hectic tariff campaign.
Tuesday’s selling pressure came after yet more political seesawing as Trump threatened to double tariffs on Canadian steel and aluminium to 50%. The surprise move was in retaliation for Ontario adding a 25% surcharge on electricity it sends to US states – which itself was a response to the initial tariffs.
Ontario Premier Doug Ford then quickly suspended its surcharge after US officials agreed to talks in Washington later this week. In a joint statement Ford and US Commerce Secretary Howard Lutnick said they had a “productive conversation” “on Tuesday.
“This is Trump 2.0 and he’s made it clear he will wield this tariff tool until he gets what he wants from his opponents. However, investors have been left scratching their heads about exactly what that really is,” said Danni Hewson, head of financial analysis at AJ Bell.
In economic news, the NFIB’s Small Business Optimism Index fell to 100.7 in February, from 102.8 in January, missing the 101.0 consensus forecast. The uncertainty sub-index rose 4 points over the month to its second-highest recorded level of 104, with just a net 12% of owners saying it was a good time to expand their business.
Meanwhile, January’s JOLTS report revealed job openings had increased by 232,000 to 7.74m, according to the Bureau of Labor Statistics, up from a revised reading of 7.51m in December and ahead of market expectations of 7.63m.
In other news, Citi downgraded its stance on US equities on Tuesday to ‘neutral’ from ‘overweight’ as it made changes to equities and credit in its global asset allocation, in line with its view “that US exceptionalism is at least pausing”.
Market movers
Airline and travel stocks were on the descent on Tuesday after Delta became the latest carrier to slash financial forecasts, cutting growth guidance for the first quarter by around a half. The Atlanta-based airline now expects revenues in the three months to 31 March to be between $13.9bn and $14.1bn, representing 3-4% growth from last year’s $13.7bn. Earlier guidance from the company pointed to growth of between 7% and 9%.
American Airlines and United Airlines both dropped, along with travel tech platforms Expedia and Booking Holdings. However, Southwest outperformed with shares up 8% after announcing that it would end its “Bags Fly Free” promise to customers for the first time.
Ford and General Motors were in reverse after Trump’s threat to retaliate with fresh taxes on autos in his latest spate with Canada. “Ontario is home to vast swathes of auto manufacturing hubs, part of a complex supply chain that zig zags across borders,” explained Hewson from AJ Bell.
Also lower was Dick’s Sporting Goods despite posting bumper holiday sales, as the retailer forecast full-year earnings below Wall Street estimates on concerns about the health of the US economy mount.
However, it was Kohl’s that was the heaviest faller of the day, dropping 24% after the department store chain posted a slide in fourth-quarter sales and warned of another difficult year ahead.
Wednesday newspaper round-up: ONS, Toyota, Reach
The UK’s embattled statistics agency cannot reverse a pandemic-era decision to release official data on the state of the economy before financial markets open because its creaking website could crash, it has emerged. The Office for National Statistics (ONS) had sought views on whether to revert to releasing statistics – such as GDP and inflation data – at 9.30am. The releases were moved forward to 7am in March 2020 to allow investors time to digest consequential data – such as the subsequent record contraction in the economy – before the start of London stock market trading at 8am. – Guardian
Toyota has said it plans to build battery vehicles in the UK in the future as it seeks to keep all of its European plants open, although it will be cautious before switching away from fossil fuels. The Japanese company, the world’s largest carmaker by sales, said it wanted to retain all eight of its European factories through the transition to electric cars, as it announced two new electric models and promised another three by 2026 under its main brand. It also showed a new electric model under its premium Lexus brand, with two more to come this year. – Guardian
Mental health claims have fuelled a surge in benefits payments post-Covid, the Institute for Fiscal Studies has warned. New figures show that the number of working-age adults claiming disability benefits across England and Wales has jumped from 2m to 2.9m since 2019, with the increase containing half a million people who cite poor mental health as their main condition. – Telegraph
The owner of the Mirror newspaper is paying more than two-thirds of its cash flow into the pensions fund raided by Robert Maxwell following an intervention by the watchdog over a shortfall of more than £200m. Reach, which also owns the Express and dozens of local newspapers, has agreed to increase its funding for the troubled MGN pension scheme amid concerns it lacked sufficient reserves to pay for its retired employees. – Telegraph
As President Trump was sworn in for a second term on a freezing cold January day in Washington’s Capitol Building, the founders and bosses of America’s top technology companies were given front row seats as the billionaire “tech bros” made a show of their allegiance to the new president. The promise of deregulation and a fresh wave of deal-making sparked a post-election rally that propelled the share prices of the tech heavyweights higher, some to record levels. – The Times
