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London stocks on the FTSE 100 tumbled in early trade on Wednesday as Trump’s sweeping tariffs came into force, including a swingeing 104% on China.
At 0900 BST, the FTSE 100 was down 1.7% at 7,778.81.
Dozens of countries, including a number of America’s traditional trading partners, have had so-called reciprocal tariffs imposed on them by Washington, the highest in decades.
China’s record rate was announced after Beijing refused to rule out retaliatory levies on US products.
The tariff regime, first announced on 2 April, has caused carnage on global markets, sending both equities and oil tumbling.
Equity markets rallied yesterday following days of falls, but Asian markets slumped once again overnight as the tariffs took effect.
Trump acknowledged the tariffs had been “somewhat explosive”. But he insisted: “After years of being ripped off, it’s America’s turn to do the ripping.” He also said countries remained keen to negotiate trade deals with the Washington.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The feared escalation of the trade war is playing out and it’s sent another jolt of deep pessimism through markets. Trump continues to act as though trade is his plaything, and he’s wound up the equity rollercoaster for another plunge downwards. With no last-minute reprieve being snuck in before the midnight deadline, Trump’s punishing 104% tariffs on Chinese goods have come into effect.
“For China, so highly reliant on exports to power the economy, this will hurt, as its goods become uncompetitive in the vast US market. But its hugely painful for US companies, reliant on cheaper Chinese goods and parts, and American consumers will ultimately bear the cost, with prices set to rise across a huge array of goods, from toys and clothes to phones and gaming consoles. This is in addition to the price increases coming in for cars, as foreign made vehicles become so much more expensive due to 25% tariffs on imports.
“The world’s largest and second largest economies are now locked in a trade war, and neither nation seems willing to back down. Trump appears to have cracked open a door, saying he will negotiate, but China will not want to lose face and compromise. There’s also a queue building up for talks with the US as countries bang on the door of the White House, seeking respite from tariffs. This offers glimmers of hope that many compromises will eventually be reached, but unpicking the knot of tariffs will take time.”
In equity markets, pharma giants GSK and AstraZeneca slid after Trump said on Tuesday that the US would soon announce a “major” tariff on pharmaceutical imports.
Recruiter PageGroup fell as it said that its slower end to the fourth quarter has continued into the new financial year, with the full-year outlook now uncertain due to an “increasingly unpredictable economic environment”.
Chief executive Nicholas Kirk said: “Given the recent introduction of tariffs and the resultant market uncertainty, we are not providing forward-looking guidance on business performance.”
Assura rallied after saying it had rejected a £1.5bn merger proposal from Primary Health Properties, as it was “not at a level that is sufficient to be recommended to shareholders”.
Instead, Assura has agreed to be bought by a consortium of private equity firm KKR and Stonepeak in a £1.6bn deal.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo | +1.86% | +16.00 | 878.00 |
| 2 |  |
Airtel Africa Plc | +1.69% | +2.50 | 150.20 |
| 3 |  |
3i Group Plc | +0.17% | +6.00 | 3,551.00 |
| 4 |  |
Antofagasta Plc | +0.11% | +1.50 | 1,391.00 |
| 5 |  |
Bae Systems Plc | +0.03% | +0.50 | 1,567.00 |
| 6 |  |
Smurfit Kappa Group Plc | +0.00% | +0.00 | 3,656.00 |
| 7 |  |
Sant Uk.8fepf | +0.00% | +0.00 | 137.00 |
| 8 |  |
Smith (ds) Plc | +0.00% | +0.00 | 582.50 |
| 9 |  |
Tui Ag | +0.00% | +0.00 | 563.50 |
| 10 |  |
Konami Group Corporation | +0.00% | +0.00 | 5,923.23 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Astrazeneca Plc | -5.14% | -533.00 | 9,841.00 |
| 2 |  |
Gsk Plc | -4.48% | -60.00 | 1,280.50 |
| 3 |  |
Melrose Industries Plc | -4.21% | -17.10 | 389.40 |
| 4 |  |
Segro Plc | -4.07% | -25.40 | 598.60 |
| 5 |  |
Ferguson Enterprises Inc. | -3.72% | -450.00 | 11,650.00 |
| 6 |  |
Bp Plc | -3.67% | -13.00 | 341.25 |
| 7 |  |
Rentokil Initial Plc | -3.37% | -10.80 | 309.70 |
| 8 |  |
Smurfit Westrock Plc | -3.26% | -101.00 | 2,998.00 |
| 9 |  |
Wpp Plc | -3.24% | -16.80 | 501.20 |
| 10 |  |
Aib Group Plc | -3.23% | -15.00 | 450.00 |
US close: Stocks swing into red as Trump hikes tariffs on China
US stocks sank sharply again on Tuesday despite starting off the session with decent gains, after Donald Trump followed through on his threat to hike tariffs on China, sending the S&P 500 to its lowest close in 14 months.
Markets initially rose strongly as investors attempted to pick up bargains after three days of heavy selling, but newsflow from the White House erased all gains by the early afternoon, and resulted in yet another sell-off across Wall Street.
The S&P 500 closed 1.6% lower (-80 points) at 4,983 – its first close below the 5,000 mark since February 2024 – with more than 350 points separating its intraday high and low. The Dow fell 0.8% to 37,646, while the Nasdaq sank 2.2% to 15,268.
In late-afternoon remarks, the White House confirmed that levies on Chinese imports into the US would be raised to 104% – slapping an additional 50% tariffs on the duties already announced last week – in response to Beijing’s retaliation against Trump’s initial tariff barrage.
Nevertheless, Treasury Secretary Scott Bessent said the administration was still up for negotiating with trading partners and claimed the US could “end up with some good deals”. Trump had said earlier in the day that he was in talks with “many” leaders regarding deals.
“Trump seems confident that China will cave in and do a deal to avoid its economy being obliterated by sky-high tariffs. Reports that China will ‘fight to the end’ would suggest otherwise,” said Dan Coatsworth, investment analyst at AJ Bell.
“What happens between the US and China in the coming days will have a major influence on the direction of markets. A deal could be positive for stocks and shares, but China standing firm could be the opposite.”
In other news, oil prices sank to their lowest since 2021 after OPEC+ said it would raise production despite weaker projections for global economic growth. WTI crude was down 4.3% at $58.10 a barrel by the close of play in New York.
The yield on a 10-year US Treasury was up 10.6 basis points at 4.283%.
Market movers
Tech stocks, which had performed well early on, were sinking by the close, with Apple, Amazon, Nvidia and Intel posting sharp losses. Chip stock Broadcom was outperforming however after unveiling plans for a $10bn share buyback plan.
UnitedHealth, Humana and CVS Health were among the few risers after the Centers for Medicare and Medicaid Services announced government payments to Medicare Advantage plans that were higher than estimated.
Walgreens Boots Alliance fell despite posting stronger-than-expected adjusted earnings, buoyed by cost savings and modest growth in its US healthcare segment, even as it continued to scale back its struggling VillageMD business. The company reported a net loss of $2.9bn for its second quarter, down from a $5.9bn loss a year earlier.
Wednesday newspaper round-up: Blue Skies Space, FS Italiane, Liverpool St station
Back in the early months of Covid lockdowns, all the talk in property circles was of would-be housebuyers plotting a move to coastal and rural areas as city dwellers prioritised a bigger garden, access to nature and more room for home working. But, five years on, the reshaping of the housing market sparked by the pandemic has gone into reverse, with homes by the sea seemingly losing some of their lustre and fewer people looking to escape from cities, data shows. The property website Rightmove said that, while much had changed since 2020, one constant was a desire among many would-be buyers for a home with more space. – Guardian
A British space company is designing a fleet of satellites that could orbit the moon and map the early universe. The Italian Space Agency has commissioned Blue Skies Space to design the satellites that could detect faint radio signals from the dawn of the universe. These signals are almost impossible to detect from Earth’s surface due to human-made radio interference, but the far side of the moon is shielded from this noise. – Guardian
Italy has joined the race to challenge Eurostar after its state-owned rail operator pledged €1bn (£860m) to run trains through the Channel Tunnel. FS Italiane said it would join forces with transport group Evolyn to use Italian-made high speed trains on the London to Paris route. The bid comes after the Office for Rail and Road (ORR), the UK rail regulator, ruled there was room for another operator in addition to Eurostar, the French-controlled monopoly which has run services since 1994. – Telegraph
Sir Keir Starmer has inked a £50bn deal with Donald Trump’s most-hated media company for a new Hollywood theme park in Bedford. The Prime Minister has given the green light to the Universal theme park and resort, which will be built on a 480-acre plot of land in Bedfordshire and open to visitors 365 days a year. Universal claims the resort, which will be one of the largest in Europe when it opens in 2031, will create roughly 28,000 jobs and deliver a £50bn boost to the economy. – Telegraph
New plans have been submitted for the £1 billion-plus redevelopment of Liverpool Street station in the City of London. Network Rail has been exploring for a number of years how it could improve Britain’s busiest railway station, which opened in 1875, but has run into opposition from heritage groups in the past. – The Times
