The FTSE 100 declined on Friday as concerns about tariffs and poor US tech earnings cast a shadow over European equities.
London’s flagship index was down 0.4% at the time of writing and looked set to close the week out in the red.
“Equity markets were flashing red as Trump’s tariff regime hits another milestone,” said Russ Mould, investment director at AJ Bell.
“Investors have been caught off guard, having previously hoped Trump would kick the new tariff levels down the road pending further negotiations with foreign trade partners. Instead, we’ve got new rates galore and that means investors need to spend time understanding what that means for companies in their portfolio.
“The fact Trump hasn’t chickened out and pushed back the 1 August deadline to 1 September has soured the tone on the markets. Europe and Asia were in a grumpy mood and futures prices imply Wall Street will follow suit later today.”
US tech stocks also played a part in equity declines on Friday. In sharp contrast to yesterday, when Meta helped lift the global equity universe, Amazon’s poor outlook for the rest of the year weighed on already dented sentiment and dragged European indices lower.
“Amazon delivered across the board – but the spotlight was firmly on AWS, and it didn’t quite shine as brightly as expected,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“While Microsoft and Alphabet have already shown strong momentum in cloud growth, AWS wasn’t the knockout many wanted to see, highlighting just how tightly investor sentiment is tied to the AI narrative right now. The focus is squarely on Amazon’s cloud business.”
Amazon shares were down 7.5% in the premarket and were set to wipe off a significant number of points from the US indices as cash trading gets underway.
In the UK, Melrose was the FTSE 100’s top riser after reporting a 29% jump in operating profit. The company was one of the most heavily hit FTSE 100 constituents by Trump’s tariffs, so investors will be delighted to see strong underlying performance and a confident outlook. Melrose shares were 6% higher at the time of writing.
IAG was among the losers despite hitting the highest levels since the pandemic earlier in the session after releasing arguably strong results for the first half.
All eyes will be on Non-Farm Payrolls today for further insight into the health of the US economy.