Stock markets have tumbled as shocked investors react to the “Liberation Day” tariffs unveiled by President Trump at the White House last night.
The FTSE 100 opened more than 1% after it was confirmed that all UK goods exports to the US will be hit with a 10% levy.
The dollar also weakened as traders scaled back their expectations for the US economy.
FTSE 100 Live Thursday
- Businesses warn over tariffs impact
- Dollar down amid weaker US outlook
- Currys lifts profit guidance
Market update: FTSE 100 down 1% as banks slide, Currys up 13%
10:30 , Graeme EvansTariffs sparked a slide for blue-chip stocks with US or Asia exposure today as the FTSE 100 index fell by 1% ahead of an expected 3% slump on Wall Street.
Standard Chartered lost 8%, HSBC and Barclays fell by more than 4% and Sunbelt plant hire business Ashtead weakened 4%. Transatlantic retailer JD Sports Fashion also fell 5% as investors reacted to last night’s “Liberation Day” announcement.
Fears that higher costs and a wave of uncertainty could push the US economy into recession meant the dollar dropped to a six-month low against a basket of major currencies, with the pound up a cent at $1.31.
Futures trading on Wall Street showed the S&P 500 index and tech-focused Nasdaq on course for falls of about 3% later today.
Asia markets were the first to react to last night’s White House announcement, which included plans for tariffs of 24% on goods from Japan and 46% from Vietnam.
As investors grappled with a trade regime on a scale not seen since the 1930s, the Nikkei 225 index initially slumped more than 4% before closing down 2.8%.
European markets also fell sharply, with benchmarks in Paris and Frankfurt initially down 2% after Donald Trump imposed tariffs of 20% on European Union imports.
This compared with the baseline of 10% for UK goods, a gap that helped the domestic-led FTSE 250 index to limit its loss to just under 1%.
The FTSE 100 index also outperformed with a fall of 1.1% or 97.88 points to 8510.60, driven by gains for Diageo, AstraZeneca and GSK on relief that their industries have avoided specific tariffs treatment.
Investors also sought shelter in defensive plays as Severn Trent and National Grid rose by about 3%.
Commodity-focused stocks were at the wrong end of the FTSE 100 after the prices of oil and key metals fell on fears that a global trade war will hit demand.
BP fell 3% or 12.15p to 420.95p, Shell dropped 2% or 67p to 2713p, Anglo American weakened 3% or 65.5p to 2084.5p and Glencore by 5.9p to 277.05p.
Among other big fallers, the tech-focused pair of Polar Capital Technology Trust and Scottish Mortgage Investment Trust dropped 4% and 3% respectively.
Stocks with significant US exposure fared badly in the FTSE 250 index, including Watches of Switzerland after a decline of 11% or 47.8p to 375.6p.
Luxury goods firm Burberry also fell 6% or 44.6p to 726.6p, while Vinacapital Vietnam Opportunity Fund lost 9% of its value with a decline of 40p to 390p.
On the FTSE 250 risers board, Currys shares jumped 13% or 11.75p to 100.7p after further sales progress led it to upgrade profit guidance for the year about to end.
Currys on a roll after profit upgrade
09:13 , Graeme EvansCurrys shares are up 11% or 10.1p to 99.1p in the FTSE 250 index, returning the electricals chain to near the three-year high seen in mid-February.
The surge followed an upgrade to profit guidance, with Currys now set for an adjusted surplus of around £160 million in the financial year about to end.
This compares with previous guidance of £145-155 million and follows further like-for-like sales growth in the period since early January.
The stock had been below 50p just over a year ago.
GSK and AstraZeneca higher as tariff jitters ease
09:02 , Graeme EvansGSK and AstraZeneca shares have risen amid relief that the worst-case fears of investors prior to the tariffs announcement were not realised last night.
Shore Capital healthcare analyst Sean Conroy said that a White House fact sheet appeared to show that pharmaceutical goods imported into the US will be exempt from higher-rate reciprocal tariffs.
However, Dr Conroy added: “It is still somewhat unclear whether the broader reaching 10% baseline tariffs could still be levied against imported drugs and vaccines.”
Given the globalised nature of supply chains across the industry, the shares of GSK, AstraZeneca and other large-cap pharmaceutical companies had fared poorly in the run up to the tariffs announcement
GSK shares today rose 18p to 1451.5p and AstraZeneca lifted 102p to 11,330p.
FTSE 250 down 1.3%, Watches of Switzerland shares 7% lower
08:33 , Graeme EvansStocks with significant US exposure fared badly in the FTSE 250 index, including Watches of Switzerland after a decline of 8% or 32p to 391.4p.
Dr Martens dropped 3% or 1.55p to 51.45p and corporate merchandise business 4imprint weakened 5% or 185p to 3610p.
The introduction of a 46% tariff on goods from Vietnam triggered falls of 7% for the FTSE 250-listed Vietnam Enterprise Investments and Vinacapital Vietnam Opportunity Fund.
Allianz Technology Trust also dropped 20.5p to 344.5p as the FTSE 250 index weakened 1.3% or 252.57 points to 19,397.06.
FTSE 100 down 1.2%, BP and Barclays among big fallers
08:15The FTSE 100 index is 1.2% or 99.60 points lower at 8508.88, having initially opened at a two-month low of 8481.
Commodity-focused stocks are among the big fallers after the prices of oil and key metals dropped on fears that a global trade war will hit demand.
BP fell 3% or 12.25p to 420.85p, Shell dipped 2% or 64.5p to 2715.5p, Anglo American weakened 4% or 93p to 2057p and Glencore slid 3% or 8.8p to 274.15p.
Among other big fallers, the shares of Barclays slid 4% and Nvidia backer Scottish Mortgage Investment Trust dropped 3%.
In contrast to London, the Cac40 in Paris and the Dax in Frankfurt opened more than 2% lower after European Union imports were the subject of 20% tariffs.
In Asia, the Nikkei 225 fell 2.8% after Donald Trump imposed a 24% tariff on Japanese goods. Hong Kong’s Hang Seng index weakened by 1.6%.
Dollar weakens as US growth forecasts cut
07:36 , Graeme EvansPreliminary estimates by economists at Deutsche Bank suggest that the implementation of last night’s tariffs announcement could knock around 1-1.5% off US growth this year.
They estimate that the average tariff rate on US imports could now rise into the 25-30% range, a level towards the worst end of expectations.
Mark Haefele, chief investment officer at UBS Global Wealth Management, added: “Even if tariffs are ultimately reduced by year-end, the near-term shock and associated uncertainty is likely to drive a near-term slowdown in the US economy and reduce full-year 2025 growth to closer to or below 1%.”
UBS expects the Federal Reserve to deliver between 75 and 100 basis points of rate cuts over the remainder of 2025.
The dollar weakened today, with the pound up 0.8% at its highest level since October at $1.31. The dollar against a basket of major currencies is at its lowest level in six months.
Businesses warn tariffs will cause “untold damage”
07:24 , Graeme EvansBusiness groups have warned that Donald Trump’s tariffs will have a “devastating” impact on UK firms who are already grappling with sluggish growth.
Trump confirmed a 10% tariff was being imposed on US imports of UK goods – the same level as the global “baseline” he was setting for countries around the world.
The Federation of Small Businesses (FSB) warned the move will deal a “major blow” to small and medium businesses, who are already facing pressure from weak growth at home.
Currently, 59% of small UK exporters sell into the US market, the FSB said.
“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,” Tina McKenzie, the FSB’s policy chair said.
S&P 500 index seen 3% lower amid trade war fears
07:21 , Graeme EvansS&P 500 index futures are down more than 3%, meaning the US benchmark is set for correction territory based on a 10% fall from its record high in February.
The tech-focused Nasdaq is also seen more than 3% lower.
IG chief market analyst Chris Beauchamp said: “The world is echoing to the sound of earnings estimates being frantically revised, and this portends a further leg down for US stocks.”
Beauchamp said markets are braced for retaliation from America’s trading partners, or at least threats of retaliation.
He added: “Should major partners like the EU impose higher costs then we can be certain the US will also respond in kind. Markets face the kind of trade war not seen for decades.”
Currys ups guidance as sales progress continues
07:12 , Graeme EvansCurrys today upgraded profit guidance after reporting that like-for-like sales growth continued in the period since the start of January.
The electricals chain said the positive performance spanned its UK and Ireland division and the Nordics.
With less than five weeks of the financial year remaining, adjusted profits are seen at around £160 million compared to previous guidance of £145-155 million.
Shares in the FTSE 250-listed company have risen 44% in the past year amid a recovery in its trading performance. It said today it expects to finish the year in a strong net cash position.
A full year trading update is scheduled for 21 May.
FTSE 100 set for big fall, Nikkei down more than 3%
07:01 , Graeme EvansThe FTSE 100 index is set for a fall of about 138 points or 1.6% after Donald Trump’s package of tariffs sparked fears of a global trade war.
In Asia trading, the Nikkei 225 index is down by more than 3% while the Hang Seng index has fallen by just under 2%.
The price of Brent Crude is down by 2% at just above $73 a barrel, while the safe haven of gold remains in record territory above $3100 an ounce.
The pound has strengthened against the dollar to trade at just below $1.31.
Adam Hetts, Global Head of Multi-Asset and Portfolio Manager at Janus Henderson Investors, said: “Eye-watering tariffs on a country-by-country basis scream 'negotiation tactic,' which will keep markets on edge for the foreseeable future.
“Fortunately, this means there's substantial room for lower tariffs from here, albeit with a 10% baseline in place.
"We've seen the administration have a surprisingly high tolerance for market pain, now the big question is how much tolerance it has for true economic pain as negotiations unfold.”
