The week was relatively quiet as it started with public holidays in the US and UK. The big news was that a US court declared some of Donald Trump’s tariff moves were not within his authority and requested tariffs were halted within 10 days. This decision was, however, reversed by the Court of Appeal, saying that the tariffs plans could remain in place while the court "considers the motions paper". The Trump administration said it will fight the case up to the Supreme Court.
The FTSE 100 was up+0.4% over the week by mid-session on Friday, with the more UK-focused FTSE 250 also trading up +1.5%.
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Global trade
A US court blocked Donald Trump’s sweeping tariff regime, after it ruled that the president had exceeded his authority. The US Court of International Trade ruled that Congress alone had exclusive authority to regulate commerce with other countries, and that presidential powers to safeguard the economy did not overrule that. The ruling invalidates most of Trump's tariffs with immediate effect. The administration has been given ten days to dismantle the regime. Markets rallied following the judgement and the dollar strengthened. The White House said it would appeal, however, and claimed it was "not for unelected judges to decide how to properly address a national emergency".
However, a federal appeals court reinstated his tariffs plan. The Court of Appeals accepted the White House's appeal to the earlier ruling saying that the tariffs plans could remain in place while the court "considers the motions paper". Mr Trump is yet to directly comment on the rulings – one of his top advisors, Peter Navarro, told media that the administration was prepared to take the case "up the chain of command" after the appeals court if necessary. This would mean asking the Supreme Court to rule on the constitutionality of its tariff plan.
Trade talks between the US and China are “a bit stalled” and may need to be reinvigorated with a call between Donald Trump and Chinese leader Xi Jinping, US Treasury secretary Scott Bessent said. This suggests that the two sides have made little progress since they agreed two weeks ago during talks in Geneva.
US President Donald Trump appeared to set a two-week deadline for Vladimir Putin.
The Trump administration ordered US companies that offer software used to design semiconductors to stop selling their services to Chinese groups. Electronic design automation software makers, which include Cadence, Synopsys and Siemens EDA, were told via letters from the US Commerce Department to stop supplying their technology.
The boom for the tourism sector continues, but what are its prospects should Donald Trump’s trade war continue to hit consumer confidence?
Economics
Officials from the Federal Reserve indicated during their most recent meeting that they might encounter "difficult trade-offs" in the upcoming months, with rising inflation occurring alongside increasing unemployment. This perspective was supported by projections from central bank staff that highlighted heightened risks of a recession, as revealed in the newly released minutes from the 6-7 May meeting. Officials from the Federal Reserve indicated during their most recent meeting that they might encounter "difficult trade-offs" in the upcoming months, with rising inflation occurring alongside increasing unemployment. This perspective was supported by projections from Fed staff that highlighted heightened risks of a recession, as revealed in the newly released Minutes from the May 6-7 session.
Geopolitics
US President Donald Trump appeared to set a two-week deadline for Vladimir Putin, threatening a different response if the Russian counterpart was still stringing him along regarding peace in Ukraine. Since Sunday, Trump has written multiple posts on social media saying that Putin has gone "absolutely crazy" and is "playing with fire" after Russia intensified its attacks on Ukraine. The bombardments by Russia are said to have been some of the largest and deadliest attacks since the start of the war, now in its fourth year.
Companies
AutoTrader slightly missed market revenues forecasts in the first quarter and shares in the online car dealer fell from near all-time highs. The car selling platform said Britain's new car market grew 3% over the last year, mainly driven by more sales for company fleet vehicles, but standard retail sales slipped 4% year-on-year.
B&Q and Screwfix-owner Kingfisher posted an uptick in first quarter sales driven by strong demand at the British DIY chain. Total sales rose 1.8% on a like-for-like basis to £3.3bn in the three months to 30 April 2025. This was driven by a 5.9% like-for-like increase to £1.7bn in its UK and Ireland business helping to offset a 3.2% decline in both France and Poland.
Rentokil Initial said it had agreed to sell its Workwear business in France to HIG Capital for around €410m. Net cash proceeds are expected to be about €370m and the deal is should to complete in the fourth quarter of this year.
Artificial intelligence (AI) chip giant Nvidia’s first-quarter earnings were complicated by the effective US government ban on exporting its H20 chips to China. Prior to earnings, a few analysts had commented that consensus had not adequately reflected the loss of revenue from the restriction, potentially leaving scope for investor disappointment. Demand, however, for Data Centre chips outside of China remains “incredibly strong” according to chief Jensen Huang. While Data Centre revenue of $39.1bn was very modestly below expectations, a change from their customary beat, the impact from lost H20 sales at $2.5bn was worse than expected (~$1.0bn), implying greater than expected strength elsewhere.
While Synopsys’s first-quarter results were solid, investor sentiment was dampened by reports that the Trump administration has directed major electronic design automation (EDA) providers – including Synopsys, Cadence, and Siemens EDA – to cease sales to Chinese entities. On the earnings call, Synopsys stated it has not received any formal notification from the US Bureau of Industry and Security (BIS) regarding new export controls and declined to speculate on potential implications. The company reaffirmed its full-year guidance, which already factors in declining China revenue but does not reflect the impact of any newly reported restrictions.
Chinse retail giant Shein is reportedly working towards a listing in Hong Kong after the online fast-fashion retailer's proposed London IPO fell short of getting the green light from the China Securities Regulatory Commission. Reuters, which quoted anonymous sources familiar with the matter, said the Chinese firm intends to file a draft prospectus with Hong Kong's stock exchange in the coming weeks and hopes to go public within the year.
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