The FTSE 100 index experienced a mixed performance on Friday, February 28, 2025, as global markets reacted anxiously to new tariffs announced by US President Donald Trump, alongside negotiations on trade agreements with UK Prime Minister Keir Starmer. Despite these uncertainties, the FTSE 100 (^FTSE) managed to edge up by 0.3%, reversing earlier losses.
Market jitters have plagued global investors following Trump’s announcement of sweeping tariff measures—including a 25% tax on imported goods from Canada and Mexico, set to take effect on March 4, 2025. Investors remain wary, fearing these tariffs could trigger retaliatory measures from trading partners, disrupting global supply chains and corporate earnings. "Investors remain on edge following president Donald Trump’s unexpected announcement of a 25% tariff on Canadian and Mexican imports, set to take effect on 4 March," noted Naeem Aslam, Chief Investment Officer at Zaye Capital Markets.
Meanwhile, the situation on the European front was lackluster, with Germany’s DAX (^GDAXI) dropping 0.3% and France’s CAC 40 (^FCHI) declining by the same margin. The downward trend outside the UK highlighted the FTSE’s resilience under pressure.
British Airways’ parent company, IAG, emerged as the top performer on the FTSE, climbing over 5% after announcing its earnings report. IAG reported a remarkable 27% increase in operating profit for 2024, up to €4.4 billion (£3.6 billion), driven by strong demand. Chief Executive Luis Gallego said, "We are delivering world-class margins and returns, in line with the targets we set out to the market just over a year ago." Gallego also shared plans for substantial shareholder returns, marking IAG’s strong recovery post-pandemic.
This enthusiasm for IAG was mirrored by positive sentiment for other UK corporations, including education publisher Pearson, which saw its shares rise after favorable results. Companies such as IMI and Weir also experienced increases in their stock values, contributing to the overall positive atmosphere surrounding certain sectors.
On the contrary, companies like Rentokil and St James's Place faced declines. Their respective share price dips indicated the nerve-wracking environment created by the overarching tariff concerns and recent corporate earnings. Although the FTSE touted resilience through this turbulence, the reality for many companies remains fraught with uncertainty.
Further complicative elements emerged from results of Morgan Advanced Materials, whose shares plummeted 19% following gloomy forecasts for 2025. The manufacturer noted uncertain demand across several key markets, which casts doubt over its future profitability. Morgan’s projection of mid-single-digit revenue declines has left investors scrambling, as such indicators raised concerns about the broader industrial outlook.
The overall mood of the markets reflects this duality—while some companies like IAG demonstrate solid financial recovery and outperformance, others succumb to pressure from external economic environments and sector-specific challenges. Stocks across the globe fluctuated, with significant declines seen throughout Asian markets, reinforcing the idea of trepidation stemming from forthcoming US tariff policies.
Even the world of cryptocurrencies faced turbulence, as Bitcoin slid below the $80,000 mark, suffering significantly after Trump’s tariff announcements. The cryptocurrency market seems increasingly tethered to broader investor sentiment, which is presently cautious. Susannah Streeter, head of money and markets at Hargreaves Lansdown, remarked on the interconnectivity of market conditions, stating, "Crypto euphoria is so highly entwined with broad investor enthusiasm." This interdependence suggests any adverse shifts could lead to broader declines across asset classes.
Despite the chaotic backdrop, the FTSE 100 is on course to post its second consecutive monthly gain—an encouraging statistic considering it marks the first time since summer of the previous year. It has successfully navigated stormy waters, positioning itself favorably compared to other European indices. For year-to-date performance, the FTSE 100 appears to remain competitive against benchmarks like the S&P 500 and Nasdaq.
With economic analysts continuing to monitor the developments closely, the upcoming weeks will be pivotal as markets react to newly implemented tariffs and broader corporate earnings reports. The resilience of the FTSE and its major players will be put to the test as uncertainty lingers, with the potential for significant fluctuations on the horizon.
Going forward, the interplay between domestic growth prospects, global trade relations, and specific sector recovery will dictate the FTSE 100's stability. Investors should remain vigilant, as the market remains susceptible to shifts driven by policy decisions coming from both sides of the Atlantic.