Stock markets on both sides of the Atlantic saw positive movements on Tuesday, as investors reacted to Donald Trump’s inauguration the day before, trying to make sense of the new president’s policy directions.
The FTSE 100 index in London rose by 27.75 points, closing at 8,548.29, marking a 0.3% increase from the previous day. UK stocks continued to perform well, despite the uncertainty surrounding President Trump’s policy stance on trade tariffs.
One of the most notable aspects of Trump’s early presidency was his rhetoric around trade and tariffs, which investors had been monitoring closely. However, the new president refrained from imposing widespread tariffs on the US’s trading partners. Instead, he suggested that 25% tariffs could be applied to imports from Mexico and Canada, though this did not immediately materialise into action.
Russ Mould, an investment director at AJ Bell, commented that investors were still trying to discern the substance of Trump’s plans, separating speculation from actual policy. “The big surprise was a lack of immediate action on trade tariffs as part of Trump’s initial list of executive orders,” Mould explained. “For someone who has repeatedly discussed making American companies buy American goods and deterring foreign countries from profiting from the US, it was surprising that tariffs were not at the forefront of his agenda.”
Trump did, however, address the issue of tariffs before his inauguration day was over, signalling that 25% tariffs on imports from Mexico and Canada could be implemented as early as February 1. This statement caused both the Mexican peso and Canadian dollar to weaken, while US equity futures dipped, although the pullback was short-lived as S&P 500 futures subsequently rose.
By the close of European markets, the S&P 500 was up by 0.7%, and the Dow Jones was up by more than 1%, as both indexes had been closed the previous day in observance of Martin Luther King Jr. Day in the US. In Europe, Germany’s DAX index closed with a modest gain of 0.25%, and the CAC 40 in Paris rose by 0.5%.
The British pound showed a slight uptick, rising by 0.1% against the dollar to trade at 1.2331, while it remained flat against the euro at 1.1825.
In company news, shares in Boohoo surged by 2.4%, after the fast-fashion retailer successfully fended off a bid from Frasers Group to overhaul its leadership. Shareholders rejected the proposal, voting 63% against plans to remove Boohoo’s CEO and co-founder, Mahmud Kamani, who holds a 12% stake in the company.
Elsewhere, Shoe Zone reported a 38% drop in pre-tax profit for the year ending in September, with profits falling to £16.2 million due to a 2.7% decline in sales. The company attributed the profit slump to rising energy, shipping, and wage costs, leading to a 5% drop in its shares.
In contrast, Premier Foods celebrated a strong post-Christmas performance, with group sales rising by 3.1% over the 13-week period, driven in part by a 20% increase in mince pie sales. The company said it was on track to meet the upper end of its shareholder guidance, and by the end of the day, its shares had risen by 2.6%.
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The FTSE 100’s biggest risers included Lloyds, which gained 2.34p to reach 61p, Games Workshop, up 430p to 13,980p, Endeavour Mining, up 45p to 1,559p, Airtel Africa, up 3.2p to 127p, and Ashtead, which rose 136p to 5,466p.
The biggest fallers on the FTSE 100 included Pershing Square, which dropped 118p to 4,182p, AB Foods, down 53p to 1,949p, Rightmove, which lost 17p to close at 647.4p, Glencore, which fell by 6.6p to 380.6p, and Haleon, which dropped 6.1p to 367.3p.
As traders continue to assess President Trump’s policies and their potential impact on the global economy, the stock markets will remain highly sensitive to any further developments. The next few weeks will be crucial in determining how Trump’s administration affects international trade relations and economic stability, both in the US and across the world.
