Investors take a tea break from tariff woes

Key takeaways

Trade tensions continued to rumble away in the background last week, but financial markets shifted their attention to corporate news.

Respite for global share prices after a painful patch
There was reprieve for global stock markets last week after a period of intense volatility. The UK stock market, measured by the FTSE 100, enjoyed its longest streak of good performance since 2019 (rising for ten days straight). European stock markets – which have come into relative favour amid tariff-based turmoil – experienced modest gains too. Across the Atlantic Ocean, the embattled US stock market also delivered a better run, boosted by strong performances from some of the giants of the technology sector..

Tech giants were the stars of the show
Good revenue results and substantial investments in AI technologies by Google’s holding company Alphabet and chip firm Nvidia met with share price rises: welcome news on the heels of a difficult few months for tech investors. Another giant of the US stock market – Tesla – also enjoyed a rebound in its share price, despite declining revenue and a drop in the volume of electric vehicles delivered in the opening months of 2025. Investors were heartened to hear that CEO Elon Musk would take a step back from his role in the US government, refocusing his attentions on the business.

Are they even talking? Mixed messages from Presidents Xi and Trump
US and Chinese leaders are struggling to agree on whether or not tariff negotiations are in progress at all. Over the weekend, President Trump claimed that trade talks with China were progressing, indicating that President Xi had reached out to the White House. However, Chinese authorities then stated emphatically that no consultations or negotiations were taking place. On the back of repeated tariff escalations between these two economic heavyweights, such uncertainty around the basic facts will do little to encourage hopes for resolution. However, this has been a very changeable situation from the outset, and the picture could alter again very quickly from here.

Business activity is slowing ... will central banks react?
The tariff wars have created decision-making paralysis for a range of businesses around the world. Last week, survey data from major advanced economies like the US, Europe and the UK suggested slowing activity across the private sector. While this is of course unwelcome news, it could also give central banks more room to manoeuvre, such as through further interest rate cuts.

Market moves

• Both stock and bond markets performed better last week, with market volatility calming somewhat after weeks of upheaval. While tariff wars remain a concern, the market focus took a time out, shifting instead to issues like company earnings news.
• Oil prices continued to decline, responding to both an increase in production by OPEC (adding to the available supply of oil) and projections for a lower demand for energy ahead.

What to look out for this week

• ‘Corporate earnings season’ will continue in the US, with large companies like Apple, Microsoft and Amazon sharing their latest financial results.
• European inflation and growth data could influence the course of action for interest rate changes from the European Central Bank.
• The latest US jobs report – covering April – will also help the US central bank decide if it should make any changes to interest rates soon.

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