Market Report: markets rise after a whirlwind weekend of tech tariff drama
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “Just when it seemed the tariff chaos couldn’t get any worse, tech investors have spent the weekend scrambling to make sense of a whirlwind of confusing – and at times contradictory – messages coming out of the White House. Despite the drama, European markets have taken an easing stance on US tech components as a positive in a broad-based rally this morning, with the FTSE 100 up 1.5% in early trading.
This time, it’s chips, smartphones, and other tech components taking centre stage. While there were early signs on Friday night that some broad exemptions might be in play, it turns out tariffs are still very much on the table. But here’s the twist: despite the messy rollout, what’s caught investors’ attention is the news that these products won’t be hit with the harsh China-specific tariffs. Instead, it looks like an existing 20% tariff will be applied – at least for now – while further decisions around how best to deal with this bucket of products go on in the background.
The net effect is positive for tech, especially for giants like Apple, which could’ve seen their entire pricing strategy thrown into disarray under the proposed 145% China tariffs. Instead, this reprieve, and news that further tariffs will be a couple of months away, gives Apple time to build up its US inventory to cover the current iPhone sales cycle without needing knee-jerk price hikes. Decisions on pricing can then be made alongside the launch of its latest handset in September. It’s still a bit chaotic, but this is a better outcome for the tech sector than when we closed on Friday and, as a result, US futures are trading higher – even as volatility spikes yet again.
One asset shining brightly amid the chaos is gold. It’s been on a remarkable upward trend this year, with only a few minor stumbles along the way. This weekend’s tariff antics have only amplified its safe-haven appeal, pushing prices to yet another all-time high as investors search for assets uncorrelated to White House drama.
Brent oil futures hovered around $64.80 per barrel on Monday, swinging between modest gains and losses as US-China trade tensions continued to cloud demand expectations. Uncertainty remains high with more tariffs potentially on the way, while OPEC+’s faster-than-expected output hike has raised fresh concerns about oversupply. Meanwhile, signs of easing tensions between the US and Iran further boost global supply, especially for key buyers like China.
Markets might be trading higher today, but with so much uncertainty, tomorrow’s direction is anyone’s guess. The key to navigating this kind of uncertainty is sticking to a long-term plan – because quality businesses tend to have a nice habit of emerging from the storm stronger than ever.“