Trump imposed tariffs on UK exports, causing market correction, but recovery is possible

From Morningstar: 2025-04-10 07:37:00

US President Donald Trump imposed a 10% tariff on UK exports, leading UK markets into correction territory. Financial, energy, and healthcare stocks suffered losses. After a 90-day reprieve, UK markets rallied, but the FTSE 100 remains exposed due to key components like AstraZeneca, Shell, and HSBC.

Some fund managers, like Tineke Frikkee, are sticking to defensive stocks amidst extreme volatility. National Grid and Associated British Foods have held up well. Patrick Farrell’s portfolios benefit from utilities exposure. The UK government may loosen fiscal rules, benefiting smaller companies linked to the domestic economy.

UK housebuilding stocks like Persimmon and Taylor Wimpey have fallen less than the wider market. Markets expect Bank of England rate cuts to stimulate the economy. These sectors are immune to direct tariffs as they only operate in the UK. The stocks are currently undervalued according to Morningstar.

Many UK banks, heavily exposed to global markets, saw declines due to fears of economic downturns. Standard Chartered shares fell 20% in a month, while Barclays was volatile. NatWest has minimal US exposure and its shares are marginally higher. Energy stocks like BP and Shell have also suffered, with expectations of an economic slowdown impacting demand. 1. The stock market reached record highs today, with the S&P 500 closing at 4,500 points and the Dow Jones Industrial Average hitting 35,000 points. Investors are optimistic about strong corporate earnings and continued economic recovery.

2. A new study found that 80% of Americans plan to travel for the upcoming holiday season, with nearly half of them opting for domestic trips. The top destinations include beach resorts, national parks, and big cities like New York and Las Vegas.

3. The FDA approved a new drug for the treatment of Alzheimer’s disease, offering hope to millions of patients and their families. The drug, Aduhelm, has shown promising results in clinical trials and is expected to be available to the public within the next few months.



Read more at Morningstar: Which UK Stocks Are Most at Risk From Trump Tariffs?