Equity markets were generally weak ahead of Donald Trump’s self-imposed deadline for countries to strike trade deals with Washington or face “reciprocal tariffs”. Fresh tariffs were introduced on more than 90 countries, with some imposed for political reasons such as the “political persecution” of former president Jair Bolsonaro in Brazil and India’s continuing purchase of sanctioned Russian oil. Talks with Mexico, the US’s largest trading partner, and China continue so a large degree of trade uncertainty remains.
The Federal Reserve did not bow to political pressure and left US interest rates unchanged. The decision, which came with two dissenting votes in favour of a cut, underscores the central bank’s cautious stance amid rising inflation and global economic uncertainty.
The second-quarter earnings season has confirmed what many in Silicon Valley and Wall Street suspected: artificial intelligence (AI) is no longer just a buzzword – it’s a revenue engine. Technology giants including Microsoft, Meta Platforms, Amazon, and Alphabet have posted results that exceeded expectations, largely driven by their aggressive AI strategies. See a tech sector round-up here.
Technology earnings season roundup
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Donald Trump
In a flurry of high-stakes diplomacy and executive actions, President Donald Trump unveiled a sweeping series of tariff measures, intensifying his administration’s global trade offensive as his self-imposed 1 August deadline passed on Friday. Fresh tariffs were introduced on more than 90 countries.
President Trump announced a new global baseline tariff rate of 15% to 20% on imports from countries lacking bilateral trade agreements with the US, up from the previous 10% blanket rate. The move is designed to pressure nations into individual deals and marks a significant escalation in Trump’s protectionist agenda.
In a series of executive orders and social media posts, Trump linked foreign policy grievances to trade penalties. A 50% tariff was imposed on select Brazilian goods, citing the prosecution of former President Jair Bolsonaro as “political persecution”. A 25% tariff was announced in retaliation for continued purchases of Russian oil and participation in the BRICS economic bloc. Mr Trump imposed a 35% tariff after Ottawa recognised Palestinian statehood, calling it a “deal-breaker”. However, most Canadian goods are exempt under a previous agreement.
Higher tariffs for Mexico, America’s largest trading partner, are paused for another 90 days. That means the status quo will continue, in which goods from Mexico are taxed at 25%, unless they are compliant with the United States-Mexico-Canada trade deal Trump signed under his first term. In those instances, goods won’t face any tariffs, barring certain sectoral tariffs in place.
The US and China agreed to work on extending a deadline for new tariffs on each other after two days of trade talks in Stockholm concluded on Tuesday. US Treasury Secretary Scott Bessent said he warned Chinese officials that continued purchases of sanctioned Russian oil would lead to big tariffs due to legislation in Congress but was told that Beijing would protect its energy sovereignty. Mr Bessent said legislation in the US Congress authorising Trump to levy tariffs up to 500% on countries that purchase sanctioned Russian oil would draw US allies into taking similar steps to cut off Russia's energy revenues. China remains the largest buyer of Russian oil, at about 2 million barrels per day, followed by India and Turkey.
The European Central Bank warned that the escalating trade war between China and the US could exert downward pressure on eurozone inflation.
A trade deal was secured with the European Union (EU), which was hailed by both sides as a landmark agreement that reshaped the transatlantic economic relationship and averted a looming trade war. The deal slashes US tariffs on most EU imports to 15% – down from the 30% rate previously threatened – and opens the door to massive reciprocal investments. In return, the EU has committed to purchasing $750bn worth of US energy products and investing $600bn in American military equipment and infrastructure.
The European Central Bank warned that the escalating trade war between China and the US could exert downward pressure on eurozone inflation, potentially complicating its monetary policy stance. In a recent blog post, ECB economists outlined a scenario in which Chinese exporters, facing steep US tariffs – peaking at an effective rate of 135% – redirect goods to Europe, increasing supply and lowering import prices. This shift could reduce headline inflation by up to 0.15 percentage points in 2026, with smaller effects lingering into 2027. Non-energy industrial goods inflation may fall by as much as 0.5 percentage points, raising concerns about persistent undershooting of the ECB’s 2% inflation target. While the scenario is not considered the most likely, the ECB cautioned that such price dynamics could force it to reconsider its interest rate path, especially as inflation is already projected to fall to 1.6% next year.
The administration also finalised or outlined preliminary trade agreements with Japan, Vietnam, Indonesia, the Philippines, and South Korea – each designed to exempt those countries from the new global tariff floor. These deals are expected to take effect on or after 1 August.
Several nations have already signalled retaliatory measures. While Mr Trump hailed the EU deal as “the biggest of all the deals,” critics warn that the aggressive tariff regime could destabilise global supply chains and provoke a new wave of trade wars.
The table below summarises the new tariffs introduced on 1 August and the reason for their imposition:
| Country | New Tariff Rate (%) | Reason for Tariff |
| Japan | 25% | Failure to fully reciprocate US trade terms |
| South Korea | 25% | Non-tariff barriers and limited market access |
| South Africa | 30% | Trade imbalance and lack of tariff concessions |
| Kazakhstan | 25% | Insufficient progress on trade reciprocity |
| Laos | 40% | High tariffs on US goods and limited compliance |
| Malaysia | 25% | Partial compliance; deal expected but not finalised |
| Myanmar | 40% | Ongoing trade restrictions and lack of engagement |
| Tunisia | 25% | Trade deficit and lack of reciprocal tariff reductions |
Bosnia and Herzegovina | 30% | Non-compliance with US trade demands |
| Indonesia | 32% | Persistent trade barriers and limited market access |
| Bangladesh | 35% | High tariffs on US exports |
| Serbia | 35% | Failure to meet negotiation deadline |
| Cambodia | 36% | Lack of progress on trade liberalization |
| Thailand | 36% | Refusal to lower tariffs on key U.S. exports |
Economics
The US Federal Reserve (Fed) held its benchmark interest rate steady at 4.25% to 4.5% for a fifth consecutive meeting, resisting mounting political pressure from President Trump to cut rates. The decision, which came with two dissenting votes in favour of a cut, underscores the central bank’s cautious stance amid rising inflation and global economic uncertainty.
In his post-meeting press conference, Fed Chair Jerome Powell emphasised that the current policy stance remains “moderately restrictive” citing persistent inflation – now at 2.7% year-on-year - and a resilient labour market. Mr Powell acknowledged the economic drag from Trump’s escalating global tariffs but said the Fed would remain data-dependent, offering no commitment to a September rate cut.
Markets, which had priced in a strong chance of a rate cut by September, reacted swiftly. Treasury yields rose, the dollar strengthened, and equities dipped as investors recalibrated expectations. Fed funds futures now imply just a 46% probability of a September cut, down from 65% the day before. The hawkish tone also prompted analysts to revise their forecasts with the general conclusion being that the Fed had pushed out the probability of a rate cut.
The US economy rebounded sharply in the second quarter, with real gross domestic product (GDP) growing at an annualised rate of 3.0%, reversing a 0.5% contraction in the first quarter. The stronger-than-expected performance was driven by a steep 30.3% drop in imports – which subtract from GDP – and a pickup in consumer spending, which rose 1.4% compared to just 0.5% in the first quarter. While exports declined 1.8%, the overall trade balance improved significantly. Inflation showed signs of easing, with the personal consumption expenditures (PCE) price index rising 2.1%, down from 3.7% in the first quarter, and core PCE inflation (excluding food and energy) slowed to 2.5% from 3.5%. The data suggests resilience in domestic demand despite ongoing trade tensions and policy uncertainty, with the economy outperforming expectations of 2.6% growth in the quarter.
Eurozone economic growth slowed sharply in the second quarter of 2025, with GDP rising just 0.1% – a significant deceleration from the 0.6% expansion recorded in the first quarter. The slowdown was driven by contractions in Germany and Italy, which both posted a 0.1% decline in output, reflecting weak investment and softening industrial activity. In contrast, Spain led the bloc with a robust 0.7% quarterly gain, buoyed by strong consumer spending and a rebound in business investment, while France surprised with 0.3% growth. Despite the overall loss of momentum, the Eurozone narrowly avoided stagnation, outperforming economists’ expectations of flat growth.
Geopolitics
There was a sharp escalation in Russia’s war on Ukraine, with Moscow launching a wave of missile and drone attacks that killed civilians in Kyiv and Kharkiv and targeted military infrastructure across the country. Ukraine’s military reported more than 150 combat clashes. In a major counterintelligence development, Ukraine arrested an air force officer accused of leaking the locations of Western-supplied F-16 and Mirage 2000 jets to Russia. Meanwhile, President Volodymyr Zelenskyy announced progress on a large-scale weapons deal with the US, even as President Trump issued a 10-day ultimatum to Vladimir Putin to agree to a ceasefire or face sweeping new sanctions. Despite the pressure, the Kremlin dismissed the threat, claiming Russia had developed “immunity” to Western sanctions.
In the Middle East, Israel’s continued bombardment of Gaza amid a deepening famine crisis drew international condemnation and spurred diplomatic moves, including Canada’s recognition of Palestinian statehood.
Companies
Apple delivered a robust performance in its fiscal third quarter of 2025, reporting a record June quarter revenue of $94bn – up 10% year-over-year – driven by double-digit growth in iPhone, Mac, and Services sales across all global markets. The company also set an all-time high for Services revenue and saw its active device installed base reach new peaks, reflecting strong customer loyalty. Apple declared a dividend of $0.26 per share and highlighted the momentum from its WWDC25 announcements, including a redesigned software interface and expanded Apple Intelligence features.
Amazon posted strong second-quarter results, with net sales rising 13% year-over-year to $167.7bn, surpassing Wall Street’s expectations. Amazon Web Services (AWS) contributed $30.9bn in revenue, marking a 17.5% increase, though its performance slightly lagged rivals such as Microsoft and Google. Chief executive Andy Jassy highlighted the company’s accelerating artificial intelligence initiatives, including the expansion of Alexa+, new developer tools like Kiro, and logistics optimisation through DeepFleet. Amazon also reported its largest Prime Day ever and announced plans to expand fast delivery services to thousands of smaller US communities by the year-end.
After Google-owner Alphabet posted an exceptional set of second-quarter results in the prior week due to accelerating momentum in artificial intelligence (AI) and cloud computing, Microsoft also delivered a standout fourth-quarter performance, surpassing Wall Street expectations across the board. Revenue surged 18% year-over-year to $76.44bn, beating the consensus estimate of $73.81bn, while earnings per share hit $3.65, well above the expected $3.37. The tech giant’s Intelligent Cloud segment, fuelled by Azure, grew 26% to $29.88bn, exceeding forecasts and marking the first time Microsoft disclosed Azure’s annual revenue – an impressive $75bn. Guidance for the current quarter was regarded as bullish.
Meta Platforms delivered a blockbuster second-quarter performance – marking its tenth consecutive quarterly earnings beat – as revenue surged 22% year-over-year to $47.52bn and earnings per share jumped 38% to $7.14. The company’s advertising business led the charge, generating $46.56bn in revenue, buoyed by an 11% increase in ad impressions and a 9% rise in average ad prices. Daily active users across Meta’s family of apps climbed to 3.48 billion, while chief executive Mark Zuckerberg emphasised the transformative impact of AI on ad efficiency. Despite a $4.53bn loss in its Reality Labs division, Meta raised its full-year capital expenditure forecast to as much as $72bn, signalling aggressive investment in AI and infrastructure.
GSK reported a robust second-quarter performance, with total sales rising 6% at constant exchange rates, which strips out currency movements, to £8.0bn, driven by strong growth in Specialty Medicines and Vaccines. The company highlighted significant research and development progress, including three US approvals and promising late-stage pipeline developments in oncology, infectious diseases, and respiratory care. Chief executive Emma Walmsley emphasized GSK’s momentum and reaffirmed confidence in delivering on its 2025 growth outlook.
AstraZeneca reported strong second-quarter results, with total revenue rising 12% year-on-year to $14.46bn, driven by double-digit growth in its Oncology and BioPharmaceuticals divisions. The company highlighted robust R&D performance, citing 12 positive Phase III trial readouts and 19 regulatory approvals across major markets. CEO Pascal Soriot announced a landmark $50bn investment in US operations, including the largest manufacturing expansion in AstraZeneca’s history, aimed at supporting its ambition to reach $80bn in annual revenue by 2030 and to support Donald Trump’s desire to move more manufacturing operations back to the US.
Novo Nordisk’s second-quarter results were overshadowed by a sharp profit warning and a major leadership shake-up, as the Danish pharmaceutical giant lowered its full-year sales and operating profit forecasts due to intensifying competition and slower-than-expected market expansion for its blockbuster obesity and diabetes drugs, Wegovy and Ozempic. The company now expects 2025 sales growth of 8%-14%, down from 13%-21%, and operating profit growth of 10%-16%, previously forecast at 16%-24%. Shares plunged following the announcement. In a surprise move, Novo appointed insider Maziar Mike Doustdar as chief executive, replacing Lars Fruergaard Jørgensen, who had led the company since 2017. Mr Doustdar takes the helm amid mounting pressure from copycat drugs and regulatory scrutiny in the US.
Barclays shares hit their highest level since 2008 after it reported stronger-than-expected earnings for the second quarter, buoyed by a surge in investment banking revenues amid heightened market volatility. The lender posted a pre-tax profit of £2.5bn, surpassing analyst expectations of £2.23bn, while group revenues aligned with forecasts at £7.2bn. The bank’s investment banking division generated £3.3bn in income, marking a 10% year-on-year increase, driven by robust trading and net interest income despite a dip in advisory fees. Management also announced a £1bn share buyback.
Rio Tinto delivered a resilient set of first-half 2025 results, underpinned by strong performances in its aluminium and copper divisions and a recovering Pilbara iron ore operation. A 6% year-on-year increase in copper production highlighted Rio Tinto’s progress in diversifying its portfolio. Key milestones included the $6.7bn acquisition of Arcadium Lithium, new lithium agreements in Chile, and accelerated progress at the Simandou iron ore project, now targeting its first shipment by November. Chief executive Jakob Stausholm, who will step down in August, said the group remains well-positioned for mid-term growth with a robust pipeline and disciplined investment strategy.
BAE Systems reported a robust first-half performance, with sales rising 11% year-on-year to £14.6bn, slightly ahead of expectations. The company upgraded its full-year guidance, citing strong demand across all sectors and continued delivery of mission-critical capabilities, amid a heightened global threat environment. Underlying earnings per share climbed 12% to 34.7p, while the interim dividend was increased by 9% to 13.5p. Order intake remained high at £13.2bn, with a closing backlog of £75.4bn. Chief executive Charles Woodburn highlighted the group's operational strength and strategic investments in technology and infrastructure as key drivers of growth and agility.
HSBC reported a mixed set of second-quarter results, with profit before tax falling 29% year-on-year to $6.3bn – missing analyst expectations of $6.99bn – largely due to impairment charges and macroeconomic headwinds. Revenue for the quarter came in at $16.5bn, slightly below forecasts, though the bank posted a 6% rise in first-half revenue to $35.4bn and a 5% increase in profit before tax to $18.9bn. Management announced a $3bn share buyback. The bank reaffirmed its mid-teens return on tangible equity guidance through to 2027 and maintained its net interest income forecast at around $42bn for the year. Chief executive Georges Elhedery emphasized HSBC’s strategic focus on digital transformation and growth in Asia, while continuing to streamline operations in Europe, including job cuts in its German equities division.
Aberdeen Group (formerly Abrdn) reported a steady second-quarter performance in 2025, with Assets Under Management and Administration (AUMA) rising to £511bn, up 1% from the previous quarter and 3% year-on-year. The company saw net inflows of £2.3bn in its Institutional and Retail Wealth division, driven by strong demand for alternative and quantitative strategies. Its Interactive Investor platform continued to grow, adding customers and attracting £5.7bn in net flows year-to-date. However, its Adviser business remained under pressure, with £0.9bn in outflows, and challenges persisted in fixed income and insurance-linked strategies.
Taylor Wimpey reported a resilient set of second-quarter results, underpinned by disciplined cost control and stable demand in a challenging housing market environment. The UK housebuilder posted a modest rise in completions and maintained its full-year guidance, despite ongoing macroeconomic pressures and elevated mortgage rates. While revenue and profit figures were not immediately disclosed, the company highlighted strong forward sales and a robust order book, supported by improved build cost inflation and operational efficiencies. Chief executive Jennie Daly noted that customer demand remained “encouragingly stable,” particularly for energy-efficient homes, and reaffirmed the group’s commitment to shareholder returns, including a maintained dividend policy. The company also pointed to progress in planning reforms and land acquisitions as key enablers of future growth.
Hermès defied the broader luxury market slowdown with a strong second-quarter performance, posting a 9% rise in sales at constant exchange rates to €3.9bn, slightly ahead of analyst expectations. Growth was broad-based across all regions, with standout performances in Japan (+14.7%), the Americas (+12.3%), and Europe (+12.6%), driven by loyal local clientele and disciplined retail expansion. The company’s recurring operating income for the first half reached €3.3bn, representing a robust margin of 41.4%. Hermès’ outperformance stems from its unwavering focus on brand equity, scarcity, and craftsmanship – eschewing aggressive volume growth and discounting strategies that have weighed on rivals such as LVMH and Gucci. Its focus on high-net-worth consumers is a key factor behind its resilience in a market increasingly shaped by cautious spending and shifting consumer sentiment.
Booking Holdings posted a strong first-half performance, driven by record-breaking travel demand and continued expansion across its platform. In the first quarter alone, the company booked over 319 million room nights – a new quarterly record – reflecting more than 7% year-on-year growth. Mobile bookings surged, accounting for more than half of all reservations, while alternative accommodations listings rose 9% to 8.1 million. The company also saw a 35% increase in “multi-vertical transactions”, including bundled bookings of flights, car rentals, and attractions. Chief executive Glenn Fogel highlighted the growing role of artificial intelligence (AI) in enhancing customer experience and partner support, with tools like the AI Trip Planner and Partner AI Assistant improving property visibility and onboarding. Strong growth in Europe and Asia underscored the global appetite for travel heading into peak season.
Starbucks reported third-quarter results that reflect both strategic progress and ongoing challenges, with total revenue rising 4% year-over-year to $9.5bn. Global comparable store sales declined 2%, driven by a 2% drop in transactions, though average ticket size rose 1%. US sales fell 2%, while China posted a 2% gain, buoyed by a 6% increase in transactions. The company opened 308 net new stores, bringing its global total to over 41,000. However, profitability was under pressure and its operating margin contracted 680 basis points to 9.9%. Management cited higher labour costs, inflation, and investments in its “Back to Starbucks” strategy – including the Green Apron service model and leadership development – as key factors. Chief executive Laxman Narasimhan said the company is ahead of schedule in its turnaround and preparing to launch a wave of innovation in 2026 to drive growth and “elevate the customer experience”.
US-listed real-estate investment company American Tower is the largest owner, operator and developer of multi-tenant mobile phone towers. It reported solid second-quarter results, with total revenue rising 3.2% year-over-year to $2.63bn, and property revenue up 1.2% to $2.53bn. Net income dropped sharply by 58.1% to $38m, largely due to foreign currency losses. Despite this, the company saw strong momentum in the US, where midband upgrades and network densification drove one of the highest quarters for services revenue on record. CoreSite, its data centre business, posted double-digit growth, fuelled by demand for artificial-intelligence-ready interconnection solutions. However, international operations faced headwinds, particularly in Latin America.
Sika, a global specialty chemicals company headquartered in Switzerland, primarily focused on products and systems for bonding, sealing, damping, reinforcing, and protecting in the building and automotive industries. The company reported a resilient second-quarter performance, achieving 1.6% sales growth in local currencies despite persistent global economic headwinds and adverse currency effects. Sika’s organic growth was supported by strategic acquisitions and a focus on sustainable, low-carbon solutions, helping it to increase its market share in Europe and North America. Chief executive Thomas Hasler emphasised the company’s resilience and reaffirmed full-year guidance as cost inflation pressures showed signs of easing.
Heating, ventilation and air conditioning group Trane Technologies delivered record second-quarter results, with net revenues rising 8% year-over-year to $5.75bn and adjusted earnings per share jumping 18% to $3.88. Its backlog increased 6% to $7.1bn, providing solid visibility for future revenues. Chief executive Dave Regnery highlighted robust demand for sustainable climate solutions and raised full-year revenue and earnings guidance, citing innovation, pricing discipline, and strategic capital deployment – including $1bn in share repurchases and $150m in debt retirement – as key drivers of shareholder value.
Anglo American reported a mixed set of fourth-quarter results, falling short of some analyst expectations amid ongoing operational challenges and commodity price volatility. Revenue came in below consensus forecasts, weighed down by weaker iron ore and copper output, while earnings per share also missed estimates due to higher costs and impairments in its platinum and diamond divisions. Analysts had anticipated a modest recovery in volumes and margins, but the results reflected continued pressure across key assets. Despite this, the company reaffirmed its full-year guidance and highlighted progress on cost-cutting and restructuring initiatives, including divestments and project streamlining.
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