Tariffs Remain a Wildcard for the Stock Market.

The stock market has been heavily influenced by the White House's unpredictable tariff policies. Strategists believe that stocks may remain in a trading range and not reach new highs until there is clear clarity around tariffs. Stocks could also retest their lows if a recession appears imminent.

The stock market has been heavily influenced by the White House's unpredictable tariff policies, with strategists expecting stocks to remain in a trading range until there is clear clarity around tariffs. This uncertainty has led to a cautious approach among investors, with some stocks potentially retesting their lows if a recession appears imminent.

Lloyds Banking Group, a FTSE 100 heavyweight, reported a seven per cent drop in profit for the first quarter of 2025. The bank's operating costs surged due to strategic investments and the timing of severance payments, while an impairment charge of £309m was set aside for potential risks from Trump's tariff policies [1]. This dip in profits was driven by a six per cent increase in operating expenses, despite an increase in loans and advances to customers.

Meanwhile, the U.S. stock market has shown resilience, with major indexes posting gains for the ninth consecutive day after a better-than-expected jobs report and rising hope of US-China trade talks [2]. The tech sector, in particular, made significant gains, with Microsoft and Nvidia growing by more than two per cent. However, the outlook remains uncertain, with some experts cautioning that it will take time to see the full effect of Trump's tariffs.

Amazon's stock also experienced a decline of over two per cent following the company's announcement that it would display the cost of President Trump's tariffs on each product. The White House responded by labeling the move as a 'hostile and political act,' leading to immediate negative market sentiment [3]. This event has also had ripple effects in the cryptocurrency space, with some decentralized commerce projects seeing increased interest.

In conclusion, the stock market's response to tariff uncertainty has been characterized by caution and a trading range. While the U.S. economy showed signs of resilience with the latest jobs report, the broader economic outlook remains uncertain. Investors are advised to monitor the situation closely and be prepared for potential market volatility.

References:
[1] https://www.business-live.co.uk/professional-services/banking-finance/lloyds-banking-group-faces-profit-31547864
[2] https://www.bbc.com/news/articles/cj0z65dq771o
[3] https://blockchain.news/flashnews/amazon-stock-drops-over-2-after-announcing-trump-tariff-transparency-amid-white-house-backlash