Trump Eyes 25% Tariff on EU Cars, Markets React

Markets focussed on potential US tariffs as Donald Trump suggested a 25% levy on European cars, adding uncertainty to global trade. Nvidia’s earnings report had minimal impact, with strong but unspectacular forecasts and a slight margin decline, while US stock indices showed mixed performance—S&P 500 flat, Dow down, and Nasdaq slightly higher. Bond yields and the dollar rose as investors awaited key economic data, including US GDP and the Fed’s preferred inflation measure later this week.

Equities

The FTSE 100 rose 0.7%, reaching a one-week high as banks and mining stocks led gains. Lloyds climbed 4.6% after two brokerages raised their price targets, while Metro Bank advanced 4.3% following the sale of a £584 million portfolio of unsecured loans. Mining stocks also performed well, supported by higher copper prices after Donald Trump suggested tariffs on US copper imports and a power outage in Chile affected supply.

Glencore rose 2%, Anglo American gained 3.5%, and Antofagasta was up 3.6%. ConvaTec rose 4.9% after posting higher annual profits. Meanwhile, luxury retailer Burberry surged 7.8% after Kepler Cheuvreux upgraded its rating to “buy”, anticipating a recovery in the sector later this year. Aston Martin fell 12% after delaying the launch of its first electric vehicle and announcing a 5% reduction in its global workforce.

The FTSE 250 also gained 0.7%, helped by a 7.7% jump in Pets at Home amid takeover speculation.

On Wall Street, the S&P 500 ended almost flat, rising just 0.01%, while the Nasdaq gained 0.26% and the Dow Jones dropped 0.43%. The biggest focus was Nvidia’s earnings, which were released after the bell. The AI leader’s stock rose 3.7% during the regular session and climbed another 2% in extended trading after forecasting first-quarter revenue above expectations. The semiconductor index gained 2.1%, reflecting positive sentiment in the AI sector.

Intuit jumped 12.6% after issuing a stronger-than-expected third-quarter revenue forecast, helping to offset losses in other sectors.

Forex & Commodities

The US dollar rose 0.2%, moving further from its 11-week low, as conflicting messages from Donald Trump on tariffs created uncertainty. He confirmed that tariffs on Canadian and Mexican imports could be delayed until April, while suggesting a 25% duty on European cars. The euro fell 0.17% to $1.0467, with investors also watching German coalition talks. The Canadian dollar remained under pressure, trading near a two-week low, while the Mexican peso initially strengthened before settling at 20.423. The Japanese yen weakened slightly to 149.34 per dollar, but remained close to its strongest level since early December. The British pound was down from Wednesday’s two-month high, last trading at $1.2658.

Gold fell 0.6% to $2,897.91 per ounce, pressured by a stronger dollar and higher US Treasury yields. US gold futures also declined 0.7% to $2,909.30. Investors are watching Friday’s Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, for clues on rate cuts.

Oil prices edged higher after Trump reversed a license allowing Chevron to operate in Venezuela, raising concerns over supply. Brent crude was up 2 cents at $72.55 per barrel, while WTI crude gained 6 cents to $68.68. Both benchmarks had hit two-month lows in the previous session following an unexpected increase in US fuel inventories. BP announced plans to increase oil and gas spending to $10 billion while cutting investment in renewables.