Greggs shares tanked on Tuesday after the purveyor of the humble sausage roll said sales growth in early 2025 has slowed to a snails pace.

Following like-for-like 5.5% sales growth in 2024, the baker revealed like-for-like sales for the first nine weeks of 2025 had fallen to 1.7%.

This was too much to bear for some investors who have become accustomed to strong levels of growth and Greggs shares tumbled over 10% in early trade.

“For quite some time it seemed that Greggs could do no wrong,” said Adam Vettese, market analyst at eToro.

“Yet now they have posted another lacklustre update with shares down a whopping 30% this year already. The company blamed challenging weather conditions in January for the slowdown, but aside from the cold snap it is more concerning if there is overall weaker demand for the product.”

Greggs’ success was built on low-cost products, but prices have gradually crept up in recent years. This will play a part in the 11.7% group sales increase over the past year but raises questions about demand going forward.

Inflationary pressures are likely to drag on profits, and Greggs risks having to increase prices further to maintain margins. However, such price hikes will be made against a backdrop of tighter conditions for the consumer, who may not see Greggs as the value option it once was.

“2024 was a year of highs and lows for sausage roll maker Greggs as it surpassed £2bn in revenue for the first time, though conditions deteriorated over the year,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

Record revenue will be of little consequence for investors, with Greggs starting the year on the back foot and key metrics set for a period of depression.

“However, 2025 is shaping up to be a tricky year; consumers are hardly flush with cash, and costs are set to rise as Rachel Reeves’s budget measures take effect,” Britzman said.

The FTSE 100 hit an all-time record intraday high on Monday as defence-related stocks helped power the index higher amid positioning for higher defence spending by European countries.

The disastrous meeting between Ukrainian President Zelenskyy and Donald Trump has been met with fresh pledges of military aid for Ukraine by the UK and other European countries, which are also expected to bolster their military spending.

From a market perspective, investors piled into defence stocks across Europe, with London-listed BAE Systems surging higher.

“The Footsie has surged into the green in a spurt of Monday motivation, with the index hitting a fresh record level,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Better prospects for China’s economy and the expectation of increased state spending on military capabilities are offsetting jitters about fraught geo-politics and US tariffs concerns,” Streeter continued.

“Defence contractors leading the charge higher, with BAE Systems up by more than 18% in early trade. The shocking clash between Trump, Vance and Zelensky has brought the need for Europe to increase collective security into sharp focus. A show of co-operation among leaders at the weekend in London has reinforced expectations that military budgets will swell in a new era of collaboration to counter the Russian threat.”

The composition of the FTSE 100 meant the index shrugged off any concerns about Trump tariffs due on Tuesday and rocketed to intraday records. Rolls Royce’s exposure to the defence sector helped its share rise 5%, extending this year’s gains to 38%.

BAE Systems and Rolls Royce are the FTSE 100’s best performers of 2025 to date. BAE Systems shares have gained more than 39% this year and are set to close at an all-time high on Monday.

While US equities are feeling the pressure of Trump tariffs on Mexico, Canada, and Chine due to kick in on Tuesday, the FTSE 100 was enjoying the possible consequences of tariffs on copper, with miners rallying on the possibility of prices rises.

Antofagasta jumped more than 3% as Anglo American and Glencore rose over 2%.

Bunzl was the FTSE 100 top faller after profit before tax fell 3.6% in the year ended 31st December and the group said they were facing uncertainties. Shares were down 8.5% at the time of writing.

“Falling prices as we emerge from an inflationary period have been a headwind for Bunzl’s revenue growth and while this effect is beginning to wear off, underlying growth looks set to remain subdued,” said Russ Mould, investment director at AJ Bell.

“Bunzl typically pursues expansion through acquisitions so leaning on M&A is not unusual for the group, although the recently acquired catering outfit Nisbets had a tough 2024.

“Investors may have taken note of the uptick in net debt, although the company’s strong cash generation meant it still felt able to hike the dividend and unveil a major share buyback.”

The FTSE 100 had a choppy end to the week, with concerns about tariffs and AI-related US stocks offsetting some very respectable earnings updates from London-listed large caps in early trade.

London’s leading index fell sharply on the open, but dip buyers quickly bid the market up as the session progressed, and the index was trading 0.3% higher at the time of writing.

“The countdown to Trump’s tariffs coming into force is now in the final few days and investors have got the jitters,” said Russ Mould, investment director at AJ Bell.

“Trump likes to make threats and stand his ground, hoping the other side blinks first and doesn’t put up a fight. The tariff recipient countries will be working hard over the weekend to finalise their game plan – do they retaliate or not?

“This uncertainty has unnerved markets and we saw a big sell-off on Wall Street last night, including what turned out to be a miserable day for Nvidia. The chip giant ended the day more than 8% lower as its results failed to reassure investors that it can fight off growing competition and deal with customers either going it alone or seeking solutions to reduce their overall AI costs.”

Nvidia’s results beat expectations, but the forward-looking nature of markets and the rich valuations of Nvidia and other tech shares mean the slightest threat to the AI rally is met with broad selling of US tech that spills over into global stocks.

That said, S&P 500 futures had stabilised on Friday, providing a base for the FTSE 100 to rally as positive corporate stories took control.

IAG was one of the standout performers after the airline said full-year revenue grew 9% and free cash flow expanded dramatically despite making significant investments in the business.

IAG shares were 5% higher at the time of writing.

“British Airways owner IAG smashed market expectations in the final quarter, delivering beats on both the top and bottom lines,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.

“The group’s market-leading networks, strong brands, and fierce operational focus continue to drive performance skyward. Despite increased capacity, planes are flying with more passengers on board on average. That shows demand for the group’s routes remains strong despite the current pressure on consumers’ incomes.

“With its London base, IAG has a high share of premium passengers relative to other airlines, given London is the global leader in arriving and departing premium passengers. These customers are more willing to pay extra for a better seat, which is helping to boost margins.”

Housebuilders were higher after Nationwide said house prices rose 3.9% in the year to February. Persimmon rose 3.4% while Berkeley Group gained 1.8%.

An upbeat outlook from Rightmove in its full-year results helped its own stock 3% but also lifted sentiment for the sector.

US PCE data and its assessment of inflationary pressures due for release on Friday could upset markets as we head into the weekend.