Markets rattled by new round of Trump tariffs and 'AI scare' trade
Markets were unable to shrug off the impact of Donald Trump's latest round of tariffs, which took effect this morning.The FTSE 100 opened in the red, falling 0.24 per cent – or 25 points – to 10,659, extending its losses after closing 0.02 per cent lower on Monday.The 10 per cent levies imposed by the US President, which are below the briefed 15 per cent, follow a backlash to the higher rate by trading partners, including the EU and UK.Even with lower-than-expected tariffs, investors were rattled by Trump's threats to use tariffs 'in a much more powerful and obnoxious way' before threatening America's trading partners.In a social media post, he said: 'Any country that wants to play games with the ridiculous Supreme Court decision, especially those that have ripped off the USA for years, and even decades, will be met with a much higher tariff, and worse, than that which they just recently agreed to.' Trump's fresh round of tariffs took effect this morning and have rattled marketsIt comes after the US Supreme Court last week ruled that Trump's use of tariffs were unlawful.As investors grapple with what a fresh round of tariffs mean, investors are worried about the impact of retaliatory measures, which Downing Street has already threatened.The EU has also rejected the hike in tariffs, saying a 'deal is a deal'.Susannah Streeter, chief investment strategist at the Wealth Club said: 'Focus is turning to President Trump's State of the Union address tonight for clues about future US trade policy. Investors are bracing for another twist in the tariff tale. 'The blanket 10 per cent global duties have come into force, but the threat of upping these to 15 per cent is still dangling. 'The President won't want to lose face against trade opponents, which is why relying on the TACO trade, and the expectation he'll 'chicken out', bears risks.' Meanwhile, other European indices also slumped at the open following a lacklustre session for Asian equities. The main German benchmark is down 0.3 per cent, while France's CAC fell 0.25 per cent.Monday's Wall Street selloff has also rattled markets, amid renewed concerns over the impact of new AI models on traditional businesses.The S&P 500 was down 1 per cent, erasing the past week of gains, as jitters over software stocks pushed the Nasdaq Composite 1.1 per cent lower.Anthropic's new AI tool designed to automate analysis, saw shares of IBM plummet 13 per cent, while other leading names also fell.Any AI scare trade in the FTSE was muted, with the biggest fallers led by Rentokil (-1.96 per cent), Fresnillo (-1.61 per cent) and banks Lloyds Banking Group (-1.49 per cent) and Barclays (-1.46 per cent).Meanwhile, Convatec rose 7.7 per cent after raising its revenue growth target, while Croda gained 4.4 per cent after a jump in profits.Amid the volatility, precious metals are rallying again, with gold jumping 0.8 per cent, or $41.05, to $5,182 an ounce, while silver nears $90 an ounce.DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Markets rattled by new round of Trump tariffs and 'AI scare' trade
