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London stocks on the FTSE 100 edged lower in early trade on Monday amid renewed trade tensions between the US and China.
At 0835 BST, the FTSE 100 was down 0.2% at 8,756.43.
Sentiment took a hit after Trump said on Friday that he was planning to double tariffs on steel and aluminium imports to 50% from this week. He also said that China had violated the Geneva trade agreement.
China hit back, accusing the Trump administration of “seriously violating” its trade deal with the US, saying that it had introduced multiple “discriminatory restrictive” measures. These include issuing guidance on AI chip export controls, stopping sales of chip design software to China and revoking visas for its students.
China’s Commerce Ministry said: “The US government has unilaterally and repeatedly provoked new economic and trade frictions, exacerbating uncertainty and instability in bilateral economic and trade relations.
“If the US insists on its own way and continues to damage China’s interests, China will continue to take resolute and forceful measures to safeguard its legitimate rights and interests.”
Kathleen Brooks, research director at XTB, said Trump’s announcement on steel and aluminium imports “was designed to hurt Chinese producers, however, it will also hurt European producers, and it may open the door to a more aggressive approach to tariffs from the White House, and more retaliation from China, something that financial markets thought had been put to bed in mid-April”.
She added: “2025 is becoming the year not to take anything for granted. Equity market volatility eased in May, yet it could easily pick up again in June, if trade tensions emerge.”
On home shores, the latest data from Nationwide showed that house priced edged higher in May.
Prices rose 3.5% on the year, up from 3.4% growth April. On the month, house prices were up 0.5% in May following a 0.6% decline the month before.
The average price of a home stood at £273,427, versus £270,752 in April.
Nationwide chief economist Robert Gardner said: “Official data confirmed that there was a significant jump in residential property transactions in March, with buyers bringing forward their purchases to avoid additional stamp duty costs. Owner occupier house purchase completions were around twice as high as usual and the highest since June 2021 (which was also impacted by stamp duty changes).
“Nevertheless, mortgage approvals data suggests that market activity appears to be holding up well following the end of the stamp duty holiday. Despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive.
“Unemployment remains low, earnings are rising at a healthy pace (even after accounting for inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank Rate is lowered further in the coming quarters as we, and most other analysts, expect.”
In equity markets, defence firms were among the top performers, with Babcock, BAE Systems and Rolls-Royce all up.
Vodafone edged lower after it and CK Hutchison Holdings said the merger of telecoms firms Vodafone UK and Three UK successfully completed on 31 May.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo | +2.58% | +30.00 | 1,193.00 |
| 2 |  |
International Consolidated Airlines Group S.a. | +1.38% | +4.50 | 330.60 |
| 3 |  |
Ck Infrastructure Holdings Limited | +1.14% | +6.00 | 532.00 |
| 4 |  |
Bp Plc | +1.11% | +4.00 | 363.75 |
| 5 |  |
Beazley Plc | +1.06% | +10.00 | 953.50 |
| 6 |  |
Shell Plc | +1.02% | +25.00 | 2,474.50 |
| 7 |  |
Legal & General Group Plc | +1.01% | +2.50 | 251.20 |
| 8 |  |
Bae Systems Plc | +1.00% | +19.00 | 1,920.50 |
| 9 |  |
Phoenix Group Holdings Plc | +0.95% | +6.00 | 640.00 |
| 10 |  |
Coca-cola Hbc Ag | +0.88% | +34.00 | 3,896.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aib Group Plc | -4.26% | -26.00 | 584.00 |
| 2 |  |
Flutter Entertainment Plc | -3.15% | -590.00 | 18,155.00 |
| 3 |  |
Wise Plc | -2.37% | -26.00 | 1,073.00 |
| 4 |  |
Ashtead Group Plc | -1.96% | -85.00 | 4,250.00 |
| 5 |  |
South32 Limited | -1.66% | -2.40 | 141.80 |
| 6 |  |
Diploma Plc | -1.37% | -64.00 | 4,622.00 |
| 7 |  |
Diageo Plc | -1.19% | -24.00 | 1,993.00 |
| 8 |  |
Standard Chartered Plc | -1.17% | -13.50 | 1,144.50 |
| 9 |  |
Auto Trader Group Plc | -1.16% | -9.20 | 784.80 |
| 10 |  |
Melrose Industries Plc | -1.15% | -5.40 | 462.70 |
US close: Stocks mixed as Trump accuses China of violating trade agreement
Major indices delivered a mixed performance on Friday after Donald Trump claimed that China had violated their preliminary trade agreement, reviving fears that the US may be on the brink of a protracted trade war.
At the close, the Dow Jones Industrial Average was up 0.13% at 42,270.07, while the S&P 500 lost 0.01% to 5,911.69 and the Nasdaq Composite saw out the session 0.32% weaker at 19,113.77.
The Dow closed 54.34 points higher on Friday, narrowly extending gains recorded in the previous session as market participants digested news that, while a federal court struck down Donald Trump’s so-called “reciprocal” tariffs, an appeals court later allowed them to be reinstated until next week as it prepared to hear the White House’s argument.
Stocks initially headed south after Trump said on social media that China had reneged on the pair’s current trade agreement, which paused retaliatory tariffs, while the blue-chip Dow Jones later managed to claw itself back into positive territory.
“Two weeks ago, China was in grave economic danger! The very high Tariffs I set made it virtually impossible for China to TRADE into the United States marketplace which is, by far, number one in the World. We went, in effect, COLD TURKEY with China, and it was devastating for them. Many factories closed and there was, to put it mildly, ‘civil unrest’. I saw what was happening and didn’t like it, for them, not for us. I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn’t want to see that happen,” said Trump.
“Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr NICE GUY!”
Treasury Secretary Bessent said that US-Sino trade talks were “a bit stalled”, while trade representative Jamieson Greer stated the White House was “very concerned” with China’s purported non-compliance with the temporary trade deal.
“United States did exactly what it was supposed to do, and the Chinese are slow rolling their compliance,” said Greer, something he called “completely unacceptable and has to be addressed”.
Market participants were also zeroed in on news that US inflation cooled for a second straight month in April, according to the Bureau of Economic Analysis‘ personal consumption expenditures price index, which declined to 2.1% on an annualised basis in April, the lowest reading in seven months, down from 2.3% in March and below consensus estimates of 2.2%. The core PCE price Index, which strips out volatile food and energy prices, rose 2.5%, down from an upwardly revised reading of 2.7% in March and in line with estimates. On a monthly basis, both headline and core PCE rose 0.1%, while the report also revealed that personal income and spending had grown 0.8% and 0.2% month-on-month, respectively.
Elsewhere on the macro front, the US trade deficit in goods narrowed sharply in April, according to the Census Bureau, dropping from a record high of $162.3bn in March to $87.6bn, marking the smallest monthly trade gap in 18 months. The marked improvement seen in the preliminary reading was principally due to a 19.8% decline in imports, more than reversing the 5.7% uptick seen in March as companies tried to get ahead of Trump’s so-called “reciprocal” tariffs. Elsewhere, exports rose 3.4% in April following a 2.3% uptick in March.
On another note, US wholesale inventories were flat month-on-month in April, according to the Census Bureau, coming in at $907.0bn after a downwardly revised 0.3% uptick in March, missing consensus estimates of a 0.4% increase. Durable goods inventories fell by 0.2% according to the preliminary estimate, following a 0.5% increase in March, while inventories of non-durable goods rose 0.4%, following the previous month’s flat reading. On an annualised basis, wholesale inventories grew 2.1% in April.
Still on data, the Institute for Supply Management‘s Chicago PMI fell to 40.5 in May, down from 44.6 in April and confounding analysts who had expected it to improve to 45. The reading indicated that economic activity in the Chicago region had contracted for an 18th month in a row, and at its sharpest rate of decline in four months.
Finally, the University of Michigan‘s consumer sentiment index was revised sharply higher in May, up to 52.2 from a preliminary of 50.8, matching April’s figures and holding steady at 2022-lows. Consumer expectations rose to 47.9 from 47.3, better than 46.5 in the preliminary estimate, while the gauge for current conditions worsened to 58.9 from 59.8.
Monday newspaper round-up: Starling Bank, US debt, airline tickets
The UK government is being pressed to wipe billions from the energy costs facing households and heavy industry by reforming the high taxes levied on electricity bills. These policy levies mean the UK pays some of the highest energy bills in the world, and are simultaneously disadvantaging British industry and stifling the efforts of households to transition to lower-carbon heating systems, according to industry trade groups. – Guardian
Starling Bank has handed its staff an almost fivefold increase in bonus pay despite an embarrassing regulatory fine and losses on government-backed Covid loans that the digital lender has blamed on its own weak controls. The digital-only challenger bank paid out £24.6m in bonuses for the 2024-25 financial year, compared with £5.3m a year earlier. – Guardian
Rachel Reeves’s tax raid on farmers will cost the Treasury almost £2bn, analysis has found, despite Treasury claims that it could boost the public purse by as much as £1.8bn. Inheritance tax reforms due to come into force next April will cause family businesses to slash investment and jobs and lead to a slowdown in the economy, according to independent consultants at CBI Economics. – Telegraph
The US will never default on its debts, Donald Trump’s Treasury Secretary has claimed, as he sought to downplay growing concerns over the state of the country’s public finances. Scott Bessent told CBS news on Sunday that the US was “on the warning track” but insisted it would not run out of cash despite approaching the so-called debt ceiling – the legal limit that the US government is permitted to borrow. – Telegraph
The cryptocurrency market has moved closer to shedding its Wild West image after one of Britain’s biggest online trading firms set out plans to allow retail clients to deal directly in digital assets. IG Group said it would become the first UK-listed company to enable retail investors in Britain to buy and sell individual tokens including bitcoin and ethereum when it starts a new service this week. – The Times
Airline ticket prices will come down as the cost of jet fuel falls, according to the boss of an airline industry body. Kerosene has been falling in price as the cost of crude comes down. Willie Walsh, the director-general of the International Air Transport Association (Iata), told Bloomberg: “It’s typically our single biggest cost so it would help to offset any weakening demand if we were to witness a slowdown. It also tends to have an impact on pricing. There’s almost a direct correlation between the price of oil and the price of airline tickets.” – The Times
