Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia.
Key market events
❌ US court rule tariffs illegal – markets rallied after the US Court of International Trade ruled that many of Trump’s import taxes were illegal and must be removed. This comes after the administration already agreed to delay tariffs on Europe by 90 days.
📈 UK business confidence bounces back – after a dip in April, confidence among UK businesses rose by 11 points in May, according to Lloyds. This jump suggests the economy is proving more resilient than expected.
⬆️ Japanese confidence grows – Japan’s consumer confidence index rose to 32.8 in May, as sentiment improved across overall livelihood - income growth expectations and employment outlook.
🔻US economy contracts – for the first time in three years, the US economy shrank with first quarter GDP growth falling at an annual rate of 0.2%. This was driven by weaker consumer spending and a drag from falling trade.
🪖 Germany boosts support for Ukraine – Germany pledged €5bn in military aid to Ukraine, focusing on building longer-range weapons.
What this means for financial advisers and clients
Global markets rallied on the news the courts were blocking many of Trump’s tariffs - really highlighting their opinion on the measures. But the legal process is far from over. The US administration swiftly pledged to appeal the decision, and a temporary reprieve was granted, allowing the tariffs to remain in force until such an appeal is heard.
The court ruling rested on Trump’s use of the International Emergency Economic Powers Act (IEEPA) and that trade deficits and alleged fentanyl trafficking didn’t constitute a national emergency. Some sector specific tariffs, such as those on steel and autos, were already set up outside of the IEEPA so were unaffected by this ruling.
While any ultimate ruling against Trump would be a major setback, a number of other legal (but considerably slower) avenues remain to ultimately raise these levies. For now, the economic uncertainty continues.
Chart of the week - China finds new customers
Source: Bloomberg, figures rebased: 100 = 31/03/2001
Why this matters
The chart above tracks Chinese exports up to the end of April 2025, with total exports shown in blue and exports to the US in black.
As shown, despite tariff uncertainty causing a sharp decline in US exports, overall Chinese trade tells a different story. Instead, total sales continue to rise as the country finds new markets for its products. Shipments to India, southwest Asia, and Europe in particular saw big jumps in April.
But losing such a big trading partner will continue to weigh on China. Lower demand will likely lead to drops in prices and risk accusations of ‘dumping’ – where excess goods are sold below market prices - potentially pushing out domestic suppliers.
So, despite this apparent resilience, risks remain under the surface. A broader US trade deal and easing of tensions would go a long way toward stabilising the outlook.
In these volatile times, where geopolitical decision-making plays a key role in market movements, regional diversification remains key.
Market recap
US markets get trade and tech boost - US markets reacted well to both news tariffs on Europe will be delayed by 90 days and strong tech results. Nvidia jumped over 5% (in USD terms) following revenue growth results which beat already high expectations.
Modest week for the UK - the FTSE 100 ended flat after a rebound from mining and oil and gas companies fought ongoing concerns around sticky inflation. Meanwhile defensive industries within the FTSE 250 outperformed.
Asia struggles to find momentum - early losses in the Hang Seng were erased thanks to a strong tech sector and improving confidence on US tariffs. However, this reversed as Asian markets opened this morning. Japan faced similar circumstances, ultimately ending the week flat on disappointing trade data and a strengthening Yen (making exporting more expensive).
Commodities ease back - oil saw a marginal decline on expectations of an upcoming OPEC+ supply increase. Gold fell on news of the US court ruling against tariffs, before paring back some earlier losses after they were allowed to temporarily continue.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.10% | 8.75% |
| FTSE 250 | 1.44% | 3.39% |
| S&P 500 | 1.99% | -6.28% |
| NASDAQ | 1.21% | -7.35% |
| MSCI Europe ex UK | 0.85% | 12.71% |
| Hang Seng | -0.08% | 7.80% |
| Nikkei 225 | 0.00% | -4.85% |
| Brent Crude | -0.37% | -14.47% |
| Gold Spot | -1.80% | 25.60% |
| UK 10yr Gilt yield | -12bps | +4bps |
| US 10yr Treasury yield | -9bps | -14bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 29th May 2025.
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