The FTSE 100 was largely flat on Monday as investors digested the latest twist in the Trump tariff saga with US markets closed for Labor Day. BAE Systems and Babcock rose on a large order for UK warships from Norway.
We are never too far from tariff headlines despite most major economies striking deals with the US, and the latest twist will be at the front of short-term traders’ minds on Monday.
“US markets are closed for Labor Day, but headlines are anything but quiet,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“A federal appeals court ruled Trump’s global tariffs illegal, setting up a Supreme Court showdown before they expire in mid-October – injecting fresh uncertainty into trade policy. That backdrop, coupled with rising bets on a Fed rate cut later this month, has gold glistening near record highs as investors seek safety. All eyes now turn to this week’s labour data, which could shape the size of the Fed’s next move.”
With US markets closed, there was a lack of insight into how US stocks would react to the court ruling after a US-tech sell-off on Friday. As a result, UK investors preferred to take a wait-and-see approach, with an early rally fading as Monday’s session progressed.
“The FTSE 100 is up around a quarter of a percent early on Monday, having put in a modest gain for the month of August, with banking stocks sliding on the last day to take some shine off the performance,” said Saxo UK Investor Strategist, Neil Wilson.
“Today, BAE Systems is riding higher after the UK secured its largest ever warship deal from Norway, with the £10bn deal supporting its Glasgow shipyards for years to come. Babcock and Rolls-Royce are also getting in on the action, with all three rising over 2% on the news.”
BAE Systems was 1.8% at the time of writing. We explained in a recently published article why BAE Systems will need plenty more orders of this scale to justify its current valuation.
Gold’s rally towards $3,500 helped Endeavour Mining shares to the top of the FTSE 100 leaderboard with a 3.8% gain.
3i Group was the top faller with a 1.8% drop.
Banks, including Barclays and Lloyds, were higher as they recovered some of the losses sustained at the end of last week on the back of suggestions of a banking windfall tax.