The FTSE 100 has surged to record highs following US president Donald Trump’s fresh barrage of tariffs. As shown below, the premier index climbed to highs of 8,972.5 this morning – adding well over 100 points.
FTSE 100 performance as of 10 July
Source: Google Finance
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The Footsie is footloose, shrugging off trade worries to dance to an all-time high. Even a fresh volley of tariff letters from president Trump has failed to knock investors sentiment.”
In his latest move, Trump revealed 50% tariffs on copper imports. With copper hitting record levels, mining and commodity stocks were among the top risers of the FTSE 100, with Glencore, Rio Tinto and Anglo American up by 4.6%, 4.6% and 5.5% at the time of writing.
Trump is also threatening a 200% levy on pharmaceutical imports.
In response, AstraZeneca – one of the largest companies on the FTSE 100 – climbed over 200 points earlier this morning.
AstraZeneca performance as of 10 July
Source: Google Finance
“Investors lapped up shares in the mining, oil and pharmaceutical sectors, showing a risk-on mood,” said Dan Coatsworth, investment analyst at AJ Bell.
“European markets in general continue to shrug of Donald Trump’s daily tariff updates, perhaps seeing them as noise and not facts. Trump is throwing out numbers left, right and centre, and investors have begun to dismiss anything that isn’t set in stone.”
With TACO – or Trump Always Chickens Out – making the rounds, investors’ are turning to economic data and corporate news flow as key drivers for markets, Coatsworth added.
There are high expectations that there will be negotiations with regions like the EU in the weeks ahead. As such, Street noted that the president’s latest moves could be seen as “posturing”.
“The FTSE 100 is stuffed full of multinationals which are sensitive to the outlook for the world economy [and are] benefitting from more optimism around,” she added.
The unpredictable nature of US policy continues to make the FTSE 100’s defensive characteristics attractive, Streeter argued.
Meanwhile, AJ Bell’s Coatsworth pointing to the US Federal Reserve’s caution in the face of Trump’s tariff agenda.
“The Fed indicates the tariff regime could drive up inflation, albeit on a temporary basis,” he said.
“At the same time, the economy and jobs market have so far proven to be resilient, which means there isn’t a rush to cut rates.”
That said, Coatsworth noted that the market probability of a rate cut in September went up after the Fed meeting minutes were released – from 60.8% to 67.2%.