FTSE 100 round-up: BP, Glencore and IAG react to ‘illegal’ Trump tariffs
After an American court ruled against the US president’s economic strategy, UK stocks are pricing in the potential impact. City writer Graeme Evans rounds up the action.
29th May 2025 14:33
by Graeme Evans from interactive investor
Market-moving NVIDIA Corp (NASDAQ:NVDA) results were today offset by another layer of tariffs uncertainty as BP (LSE:BP.) and other Liberation Day casualties struggled to recover ground in the FTSE 100 index.
The initial boost to risk sentiment after a federal court last night blocked the majority of the US reciprocal tariffs, soon faded as traders digested the implications of the ruling.
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As well as ongoing uncertainty should the case land in the Supreme Court, there are economic consequences given that the White House had planned to use tariffs to fund tax cuts.
Capital Economics said: “The ruling will throw into disarray the administration’s push to quickly seal trade 'deals' during the 90-day pause from tariffs that have now been declared to be illegal.
“Other countries will wait and see whether a higher court is willing to reverse this ruling.”
The FTSE 100 index, which has risen by 13.6% since its low point for the year on 9 April, was barely moved by the events. Benchmarks in Frankfurt and Paris were moderately higher, reflecting Trump’s earlier threat of 50% EU tariffs from 9 July.
The opening exchanges on Wall Street also looked to be modest, given that a de-escalation of the global trade war has left the S&P 500 index 200 points higher than its Liberation Day level.
It’s a recovery that’s been dubbed by some as the “TACO trade” - Trump Always Chickens Out - after a pattern where dramatic tariffs have been followed by concessions or retreats.
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Today’s Wall Street trading appeared to be more focused on the relief of forecast-beating results by Nvidia, which continues to report soaring levels of AI infrastructure demand.
Its shares were priced 6% higher in pre-market dealings, placing the chip giant near to where it traded in mid-January. That’s despite US curbs on exports of its H20 products into the China market, which will mean the loss of about $8 billion of revenues in the current quarter.
The quarterly results boosted the shares of Polar Capital Technology Ord (LSE:PCT) trust and Pershing Square Holdings Ord (LSE:PSH) in the FTSE 100 index, while a number of Asia-facing stocks also rallied on a combination of the Nvidia results and latest tariffs pushback.
They included lender Standard Chartered (LSE:STAN), which improved 29p to 1,169p, and Prudential (LSE:PRU) after an advance of 14.2p to 847.4p.
There was a measured response in the mining and oil sectors, even though the more benign tariffs environment should be beneficial for the demand outlook.
Brent crude futures rose by a dollar at one point but later gave up most of this improvement, while the price of copper traded about half a percentage point higher.
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Glencore (LSE:GLEN) was the best-performing mining stock after a gain of 4p to 276.05p, while BP surrendered almost all its initial advance to stand a mere 0.75p higher at 359p.
The oil giant is about 17% lower than where it stood prior to Liberation Day on 1 April, reflecting concerns over how a period of much lower crude oil prices will impact its balance sheet and the outlook for shareholder returns.
Shell (LSE:SHEL) is down 12.5% over the same period, while a recovery for Glencore from its low point of 230p on 7 April has yet to take it all the way back to pre-tariff levels.
Among other global heavyweights in the FTSE 100, AstraZeneca (LSE:AZN) is still 8% lower, GSK (LSE:GSK) is down 2% and Reckitt Benckiser Group (LSE:RKT) is off 5%. That’s in contrast to the performance of UK-focused and safer-haven stocks since 1 April, with Next (LSE:NXT) and Tesco (LSE:TSCO) up 15% and NatWest Group (LSE:NWG) 14% higher.
British Airways owner International Consolidated Airlines Group SA (LSE:IAG) has rallied 31% since the start of last month, leaving shares up 12% so far this year. BAE Systems (LSE:BA.) has rallied by two-thirds this year and fellow defence-focused business Babcock International Group (LSE:BAB) is 85% higher, including a rise of 25% since 1 April.
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