Trump Tariffs Shake Markets, Gold Hits Record High

US President Donald Trump announced new 25% tariffs on steel and aluminium imports, sparking investor concerns and market volatility. Gold surged to an all-time high as traders rushed to secure physical bullion ahead of potential tariffs, while Wall Street futures rebounded 0.3% after initial declines. European markets remain steady, while investors await Fed Chair Powell’s testimony and the latest US consumer price data midweek.

Equities

The FTSE 100 fell 0.3% on Friday, pulling back from a record high, as uncertainty over tariffs and weak US jobs data weighed on sentiment. The mid-cap FTSE 250 lost 0.8% but was on track for a small weekly gain. Earlier in the week, the FTSE 100 had been supported by strong corporate earnings and expectations of further interest rate cuts after the Bank of England lowered rates by 25 basis points. However, policymakers reduced their 2025 growth outlook and warned that inflation could remain nearly double the bank’s 2% target this year.

Legal & General rose 1.2% after announcing the sale of its US protection business to Japan’s Meiji Yasuda for $2.3 billion in cash. The Japanese insurer will also take a 5% stake in L&G. Precious metal miners climbed 0.7% on the day and were set for a weekly gain of nearly 6%, the best performance since October, as gold prices held near record highs. Homebuilder stocks fell 3.1% after mortgage lender Halifax reported stronger-than-expected house price growth in January, with buyers rushing to complete purchases before a planned increase in property purchase taxes in April.

On Wall Street, all three major indices declined after President Donald Trump said he would announce reciprocal tariffs on several countries next week. The Dow Jones fell 0.99%, the S&P 500 dropped  0.95%, and the Nasdaq lost 1.36%. The weaker-than-expected US jobs report also added to concerns, with nonfarm payrolls increasing by 143,000 in January and consumer sentiment falling to a seven-month low.

Amazon fell 4.1% after issuing a weaker-than-expected revenue and profit forecast for the first quarter. The company’s cloud computing division, Amazon Web Services, showed signs of slowing growth, adding to concerns about future earnings. Uber jumped 6.6% after hedge fund manager Bill Ackman disclosed a large stake in the company. Expedia surged 17.3% after reporting strong fourth-quarter results, while Elf Beauty tumbled 19.6% after cutting its annual sales and profit forecasts.

All 11 sectors of the S&P 500 traded lower, with consumer discretionary stocks leading the declines, down 2.5%. The Cboe Volatility Index, a measure of market uncertainty, rose 6.6% to 16.3.

Forex & Commodities

The US dollar strengthened as investors reacted to fresh tariff threats from President Donald Trump, with trade tensions weighing on the euro, the Australian dollar, and the Canadian dollar. The euro fell 0.1% to $1.0317, near a two-year low, while the Australian dollar edged down to $0.62705. The Canadian dollar weakened by 0.3%, reflecting concerns over US tariffs on steel and aluminium imports. The Japanese yen lost 0.3% to 151.93 per dollar, though it remained close to a one-month high as markets factored in possible interest rate hikes from the Bank of Japan. The Chinese yuan weakened past 7.3 per dollar, its lowest level in three weeks.

Gold prices held near record highs, rising 0.5% to $2,875.79 per ounce, with investors seeking a safe haven amid growing trade war fears. US gold futures gained 0.5% to $2,902.40. Analysts expect gold to test the $2,900–$2,910 range, though further US dollar strength could limit gains. Silver rose 0.6% to $31.99 per ounce, while platinum and palladium posted modest increases.

Oil prices rose, with Brent crude up 0.7% at $75.17 per barrel and US West Texas Intermediate gaining 0.6% to $71.45. Sanctions on Russian and Iranian oil continued to shape market sentiment. Trump’s claim of progress in talks with Vladimir Putin over Ukraine added an element of uncertainty. Analysts at Citi expect Brent crude to average $60–$65 in the second half of 2025, with Trump’s energy policies acting as a drag on prices.