FTSE 100 reaches one-month high as US-China tariff pause lifts global markets
The FTSE 100 climbed to its highest level in a month, rising 0.6%, as global markets responded positively to news that the US and China have agreed to cut tariffs for 90 days.
Here is a chart showing the FTSE 100’s sector performance following the US-China tariff truce news. While most sectors saw gains—particularly mining and banking—pharmaceuticals dragged, reflecting concerns over US drug price reforms.
The announcement broadly supported UK-listed multinationals, with mining and commodity stocks among the biggest beneficiaries. However, pharmaceutical giants AstraZeneca and GSK lost ground after President Donald Trump vowed to lower drug prices in the US, sparking concerns over revenue pressure.
Elsewhere in Europe, stocks continued to recover from ground losses following Trump’s earlier “Liberation Day” tariff announcement. France’s CAC 40 gained 1.4%, while Germany’s DAX edged 0.2% higher.
Chris Beauchamp, chief market analyst at IG, commented:
“The weekend meeting between the US and China has yielded yet another 90-day pause, lighting a new fire under the market rally. The rebound from the April low was beginning to look a little tired, but today’s news has given it new life.
“The longer Wall Street continues to rebound, the harder it will be for investors to avoid putting money back to work in the US—even though worries remain that the data will start to deteriorate in the months to come.”
Traders scale back rate cut expectations after US-China trade truce
Traders have pared back expectations for interest rate cuts across the UK, US, and eurozone, following signs of easing trade tensions between Washington and Beijing that have calmed fears over slowing global growth.
Comments from European Central Bank (ECB) board member Isabel Schnabel also contributed to the shift. Speaking on Friday, Schnabel cautioned against further cuts in borrowing costs, warning that ongoing global economic disruptions are driving inflationary pressures and could push inflation above the ECB’s 2% target over the medium term.
Despite the more cautious tone, markets are still fully pricing in two quarter-point rate cuts in the US by year-end. In the UK, traders are now nearly fully pricing in two cuts—down from a more aggressive stance seen on Friday. In the eurozone, expectations have softened to just one rate cut.
