The FTSE 100 fell on Thursday despite a major US court ruling on Trump’s tariffs and strong results from Nvidia sparking a rally in US stocks.
London’s leading index was trading down 0.1% at the time of writing as ex-dividends and disappointing results from Auto Trader weighed.
In contrast, S&P 500 futures surged 1.5% higher on hopes the worst of the negative impact of Trump’s tariffs could be averted, or at the very least, delayed. In a blow for Donald Trump and boon for stocks, a US court ruled that the President acted beyond his powers and block his ‘Liberation Day’ tariffs.
“The US Court of International Trade has generated some hope in the market that the tariff threat might be wiped away with its latest ruling,” said AJ Bell investment director Russ Mould.
“For the court to determine that President Trump didn’t have the authority to impose the ‘Liberation Day’ tariffs is a pretty seismic development.
“That the gains were measured rather than blockbuster reflects a healthy level of scepticism over whether this can truly rein in the Trump administration, which has already launched an appeal against the judgement.”
One would also think the gains in US shares would have had a bigger reaction to the news if Trump had not already rolled back or delayed tariffs on several key trading partners. The S&P 500 has already rallied just shy of 20% since post-tariff lows and is on the verge of a technical bull market.
There has been a similar recovery in the FTSE 100 and the extent of the gains since Trump’s tariff announcment can be attributed to the muted reaction in London’s leading index on Thursday.
Several big hitters, including Severn Trent and National Grid, trading ex-dividend contributed to the weakness on an index level.
Auto Trader was the top faller after the UK’s largest automotive platform announced increased revenues, but warned the strength of the UK second hand car market was reducing demand for their advertising products.
“You would think a buoyant market for used cars would be great news for a platform like Auto Trader but actually if anything it’s been too easy to sell second-hand vehicles of late,” Russ Mould explained.
“Thanks to limited supply and exceptionally strong demand, car tyres are barely touching the forecourt before they are snapped up and this means there is less need for retailers to buy advertising slots from Auto Trader.
“These market dynamics have also made it harder to upsell clients to more expensive packages. This has caused growth to stall and seen the shares go firmly into reverse on the publication of full-year results.”
Auto Trader shares were down 11.5% at the time of writing.
There were surprisingly few FTSE 100 gainers rising more than 1%, given the news breaking from the US. easyjet was the top riser, adding 2.3%.