Stock markets were mixed on Thursday as investors weighed concerns from the Federal Reserve about the impact of President Donald Trump’s tariffs and immigration policies on inflation. European markets varied in response to company earnings, with London’s FTSE 100 falling while Paris and Frankfurt bourses rose. “Investors are mulling the impact of interest rates staying higher for longer, given that policymakers expect US trade policy to push up the price of consumer goods,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Minutes from the Fed’s January meeting suggested officials were unlikely to cut rates soon, having already reduced them at three successive meetings, due to worries about how Trump’s policies could fan inflation. Economists have warned that the president’s plans to increase tariffs, slash taxes and regulations, and curb immigration could increase prices. Geopolitical uncertainty also pushed gold to a record high above $2,954 as investors sought the safe-haven asset.
Dealers nervously eyed talks over Ukraine after Trump called Ukrainian leader Volodymyr Zelensky a “dictator” on Wednesday, marking an abrupt policy shift as the US opened discussions with Moscow despite providing crucial funding and arms to Ukraine following Russia’s invasion.
Markets respond to Trump’s policies
All three main indexes in New York rose on Wednesday, with the S&P 500 hitting another all-time peak, but Asian markets failed to sustain the momentum on Thursday.
Shanghai pared early losses to end flat after Trump hinted a trade deal with China was “possible.” Hong Kong dropped over 1% as China’s tech rally ended. Tokyo slid on a stronger yen, which briefly broke below 150 per dollar as the Bank of Japan considers more rate hikes. In Europe, France’s Carrefour dove 6% on a sharp profit drop, while Schneider Electric gained 6% on strong results.
British Gas owner Centrica topped the FTSE 100, soaring 8% on buyback plans and investment goals. Lloyds rose over 4% despite a profit fall. Germany’s Mercedes-Benz slid 2% after 2024 profits plunged amid weak China sales and slow electric car demand.
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