S&P 500 slips as dollar weakens on Trump tariff threat

The S&P 500 turned lower after US tariff threats against Europe raised concerns around trade relations with key creditors. The dollar weakened against the yen, Swiss franc and euro, while sterling recovered from early losses to trade near $1.340. Gold and silver pushed to fresh record highs, reflecting demand for defensive assets. Oil prices eased as tensions in Iran subsided, with Brent trading below $64 a barrel.

Equities

London’s FTSE 100 slipped 0.04% at Friday’s close to 10,235.29, easing back slightly after Thursday’s record finish, but it still ended the week 0.1% higher. The FTSE 250 rose 0.13% on Friday to a five-week high and finished the week up 1.2%, helped by gains in domestically focused stocks. Mining shares weighed on the blue-chip index late on Friday after copper prices moved lower. Glencore closed 2.5% down at the end of the session, while Rio Tinto fell 1.8% by the close, as concerns resurfaced around demand from China. Precious metal miners also lost ground, with Endeavour Mining down 2.6% on Friday.

Financial stocks supported the FTSE 100 earlier in the week. The index covering investment banking and brokerage services rose 5.3% over the week after earnings updates from asset managers including Ashmore Group and Schroders. Defence stocks rose late on Friday following developments linked to the war in Ukraine. BAE Systems closed 1.4% higher at the end of the session, while Babcock International gained 1%, after Britain confirmed £20 million in additional energy aid for Ukraine.

In the United States, Wall Street finished almost flat on Friday ahead of the Martin Luther King Jr. holiday. The S&P 500 closed 0.06% lower at 6,940.01, while the Dow Jones Industrial Average fell 0.17% by the closing bell. The Nasdaq Composite also ended the session 0.06% lower. Over the full week, the S&P 500 fell 0.38%, the Nasdaq dropped 0.66% and the Dow slipped 0.29%.

Chipmakers stood out on Friday. The Philadelphia Semiconductor Index closed 1.2% higher, extending gains from Thursday as demand returned to the sector late in the week. Financial stocks were weaker overall despite solid quarterly results from major US banks earlier in the week. The S&P 500 financial sector ended Friday 0.1% higher but still recorded its biggest weekly decline since October, reflecting pressure on bank shares during the week.

Forex & Commodities

The US dollar moved lower early on Monday as Asian trading got under way, following renewed tariff threats from President Donald Trump directed at several European countries. The dollar index eased to around 99.11 during the morning, while investors shifted towards traditional safe-haven currencies. The Japanese yen strengthened, with the dollar trading down at 157.8 yen in early Asia. The Swiss franc also firmed, with the dollar slipping to 0.7985. Sterling initially fell to $1.3321 overnight, its weakest level in about a month, before recovering later in the morning to around $1.3397. The euro followed a similar path, rebounding from early losses to trade near $1.1634 after touching $1.1572 earlier in the session.

In commodities, gold prices surged to fresh records early on Monday as demand for defensive assets increased. Spot gold traded at $4,667 per ounce by mid-morning in Asia, after touching an all-time high of $4,689 earlier in the day. Silver also rose sharply, climbing to $93.50 per ounce after reaching a record $94.08 during the Asian session. Analysts at J.P. Morgan said they continue to favour gold over silver, pointing to gold’s stronger longer-term outlook despite recent volatility in silver.

Oil prices moved lower on Monday after gains late last week. Brent crude was trading around $63.85 a barrel in the morning, while US West Texas Intermediate stood near $59.08. The pullback followed signs that unrest in Iran had eased, reducing immediate concerns about supply disruption. US inventory data released last week showed a larger-than-expected build in crude stocks, adding further pressure to prices.