Today's markets: Can markets ignore Trump?

It's been a trope that 'nothing can faze this market'. Apart from a slightly dodgy claim from a Chinese AI startup. Or some tariffs, perhaps? President Donald Trump promised he’d follow through on his threat to slap 25 per cent import tariffs on Canada and Mexico on 1 February. Ford and GM saw gains wiped out and closed down half a per cent. The Mexican peso dropped sharply and Canada’s dollar slipped to its weakest against the greenback since 2020. Gold hit a record high. 

He also warned Brics countries – Brazil, Russia, India, China and South Africa – that they could face 100 per cent tariffs if they attempted to replace the dollar as the global reserve currency. 

Despite this, the FTSE 100 has extended its rally after hitting a record high, rising a further 0.2 per cent in early trade Friday morning. Heavyweight Shell is up 1 per cent after it rose yesterday on its dividend hike. On Thursday, the FTSE 100 closed at a record high and broke through the psychological 8,600 mark, up 1 per cent at 8,646.88 points. This morning it was trading around 40 points higher at 8,688. I’d be surprised if we don’t see 9,000 this year. Gilt yields continue to slide, with the 10-year back to 4.54 per cent, the lowest since December. 

Profit-beating Apple lifted US futures ahead of the open on Wall Street later today. E-mini Nasdaq-100 Futures traded up 0.7 per cent or so, while S&P 500 futures were up 0.4 per cent. Yesterday, the S&P 500 and Nasdaq 100 each climbed 0.5 per cent, while the Russell 2000 enjoyed more rotation with a 1.1 per cent gain. Arm, Nvidia and AMD all ended higher – the last now halving its DeepSeek selloff. Utilities were strong with Vistra, which got obliterated in Monday’s DeepSeek selloff,  up 14 per cent. Every sector rose, though tech was somewhat affected by Microsoft’s drop given its cloud revenue growth scare. 

Meanwhile, the European Central Bank cut as expected and left the door open to further easing. Eurostat reported the Eurozone did not grow at all in Q4. Christine Lagarde said growth would remain weak and that consumer confidence is fragile. I guess tariffs are not going to help. I fail to see how the ECB can stop cutting until the deposit rate at least falls another 100bps, then they can pause to see what next. The gulf with the US was underlined again.

By Neil Wilson, an analyst at TipRanks