Market snapshot: UK shares makes charge toward record high

US markets stumbled into the long weekend with tariff traumas continuing to take their toll.

The President’s latest broadside was aimed at the EU as he threatened 50% tariffs in the absence of progress on negotiations, only to rescind this action, albeit temporarily, over the weekend. It remains to be seen as to when investors, businesses and consumers grow weary of needing to react slavishly to every tariff pronouncement, if they have not already. The constant back and forth has made planning all but impossible, and many companies over the recent quarterly reporting season have opted not to give outlook figures as a result of the ever-changing goalposts.

• Invest with ii: What is a Managed ISA? | Open a Managed ISA | Transfer an ISA

In the meantime, President Trump has also taken aim at one of his own in the form of Apple Inc (NASDAQ:AAPL), whose shares fell by 3% on Friday following the announcement that the company would be subject to a 25% tariff unless iPhones sold in the US were manufactured domestically. Alongside concerns around the group’s exposure to China, Apple shares have declined by 20% this year and are some 25% shy of their relatively recent record high.

Elsewhere, tariff developments aside, investors will concentrate this week on releases in the form of consumer confidence and durable goods for any further clues on how the economy is faring. On the corporate front, Macy's Inc (NYSE:M) and Costco Wholesale Corp (NASDAQ:COST) should provide some colour from a consumer standpoint, while NVIDIA Corp (NASDAQ:NVDA) will likely garner most attention. The company is expected to report a 65% jump in first-quarter revenues tomorrow, and its accompanying comments, particularly with regard to China and AI chip sales, will be of equal interest.

Following Friday’s lurch and with the markets closure for Memorial Day yesterday, US futures at this very early stage are indicating a strong rebound at the open later. Meanwhile, each of the main indices remains in negative territory in the year to date, with declines of 2.2%, 1.3% and 3% for the Dow Jones, S&P500 and Nasdaq respectively.

• Insider: sizeable director purchases at two FTSE 250 companies
• Shares for the future: this one’s still a ‘screaming buy’
• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis

Asian markets were mixed to lower in the absence of a lead from Wall Street overnight, with domestic issues reclaiming the spotlight. In Japan, the Nikkei slipped after the central bank indicated a rise in interest rates over the coming months in light of a recent spike in inflation. By the same token, the Bank of Japan may be limited in aggressively raising rates due to the potential damage on the economy arising from the ongoing tariff developments.

In contrast, UK markets were off to a flyer given the latest temporary tariff truce, propelling both main indices higher and taking the FTSE100 to a year to date gain of 7.5%, and less than 1% away from the previous record high set in March.

Potentially improving risk-on sentiment, which had weighed overnight on the gold price, left the likes of Endeavour Mining (LSE:EDV) and Fresnillo (LSE:FRES) under pressure, but this was more than offset by a broad mark-up across the index. BAE Systems (LSE:BA.) and Rolls-Royce Holdings (LSE:RR.) were also in positive focus given the wider NATO discussions which are predicting further hikes in military spending. 

• Stockwatch: is this FTSE 100 share now a contrarian buy?
• This is why investors blow up – even when knowing the future

The more domestically focused FTSE250 was also comfortably ahead, helped along by non-food prices which declined by 1.5% in May, easing some inflationary concerns. While the number could be muddied by retailers encouraging consumers to spend ahead of any tariff impacts, the news was nonetheless another string to the bow of UK resilience and leaves the index as a whole 1.2% higher in the year to date.