Market Report: flat open as investors digest mixed signals on US-China tariffs
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “UK and European markets are taking a breather this morning, with the FTSE 100 flat at the open after a strong showing yesterday. The investing world is back to hanging onto every word out of the White House, but with such a confusing and often contradictory stance on tariffs, volatility is all we can really guarantee.
US markets caught a tailwind yesterday, with the S&P 500 climbing 1.67% as investors found reasons to cheer across the board – from upbeat corporate earnings and resilient economic data to signs of a cooling tone in Trump’s domestic and foreign rhetoric. Gold lost some of its shine as traders dipped a toe back into riskier assets, though gains in equities faded slightly into the close on lighter volumes and are expected to open a touch lower after a few comments from the White House that, big surprise, clouded the picture.
Nestlé shares have been stirring back to life in 2025, whisking away from the lows last seen in 2018. But while today’s Q1 results won’t spoil the appetite of turnaround bulls, they do serve up a mixed bag. Organic sales edged past expectations, but it was a flavourless beat, with pricing doing all the heavy lifting and volumes looking a little undercooked. The company’s struggle to get the right blend of price and volume continues to leave a bitter aftertaste. Add to that a pantry full of underperforming products needing fresh investment – at a time when rising debt costs and generous dividends are already eating into the cash flow – and you’ve got a recipe that’s still far from perfected. There’s a route to getting back to consistent performance, but the road looks bumpy.
Unilever served up a similar story, with a modest sales beat driven more by pricing than volume, but the undertone here is noticeably more upbeat. Management is taking bold steps to stir this giant back to life, and while tariffs remain a headwind, they’re seen as more of a breeze than a storm. Confidence is high enough to reaffirm full-year guidance, thanks to innovation gains, stronger momentum in North America, and green shoots in some struggling emerging markets. The Ice Cream spinoff is still on the menu – though improving performance might tempt some to keep it in the freezer a little longer, it’s exactly the kind of momentum management wants ahead of a demerger. While the sector’s been soft this earnings season, Unilever’s on a better path than its peers.
Brent crude oil hovered around $66 per barrel in early trading, steadying after a nearly 2% drop as investors weighed the potential for accelerated OPEC+ output against shifting trade dynamics. Several OPEC+ members are reportedly eyeing a second straight month of increased production in June, while Kazakhstan signalled it won’t scale back output at key fields. At the same time, signs of progress in US-China trade talks lent some support to prices, with reports hinting the White House could ease tariffs on China to help negotiations along.”
Aarin Chiekrie, equity analyst, Hargreaves Lansdown: “Online fashion powerhouse ASOS is on its way to delivering exactly what investors want – better profitability. Don’t worry too much about the double-digit sales decline for now. It’s part of the strategic shift, as ASOS chose to remain firmer on pricing by not moving as many items to the sales racks during the period. While that’s making for some tough comparable sales numbers, profitability is starting to reap the benefits, with underlying cash profits landing well ahead of last year.
There is still a long way to go and a lot of challenges to navigate as ASOS looks to turn its fortunes around. Active customer numbers and order numbers are still heading in the wrong direction. That’s partly due to the reduction in discounting activity and the shift in focus away from less profitable customers. Tariffs are another worry. ASOS decided to close a large fulfilment centre in the US last year, meaning many US orders are now fulfilled from warehouses in Barnsley and Berlin. The group says it’s got the flexibility to tweak its sourcing and distribution model in response to tariffs, but the potential financial impact isn’t clear yet.”