Stocks Rise as Brent Crude Falls Below $100 and Trump Announces New Tariffs
Key Takeaways
- •Brent crude oil fell 4.1% to $96.63 per barrel on Friday after briefly reaching $100 following Houthi attacks on two Saudi Arabian tankers.
- •Trump warned Iran of "major military punishment" for the Houthis' actions, as the US continued strikes on Iran for the 12th consecutive night.
- •New US tariffs of 10 to 12.5% took effect on Friday against 60 trading partners, including the UK, China, and the EU, following a Supreme Court ruling that invalidated earlier tariffs.
- •Rising energy prices threaten UK cost-of-living relief measures, even as British retail sales increased by 1% driven by warm weather and discounting.
Stocks rose on Friday as oil prices eased from two-month highs reached the previous day, while markets also assessed a new round of US tariffs announced by Trump.
The benchmark Brent crude oil price fell 4.1 per cent on Friday to $96.63 per barrel. Prices had climbed to $100 after attacks by the Houthis, an Iran-backed militia based in Yemen, on two Saudi Arabian tankers. Brent is a key global oil benchmark, so sharp moves in its price are closely watched by investors because they feed into fuel costs, transport bills and inflation expectations.
The latest rise in energy prices had taken markets back to levels seen in March, when the US and Israel launched attacks on Iran. Brent crude last traded at $100 in late May.
Houthi attacks over the Red Sea prompted Trump to issue fresh threats against Iran. He said he would hold the country “responsible” for the re-emergence of war in the Middle East and added that “major military punishment” would follow because the militia was backed by Iran. The US launched strikes on Iran for the 12th consecutive night.
Trump also unveiled a new wave of tariffs on 60 trading partners, including the UK, China and the European Union. The duties, ranging from 10 to 12.5 per cent, came into effect on Friday and effectively replaced the blanket 10 per cent tariff imposed in February. The move followed a Supreme Court ruling that many of Trump’s earlier tariffs were illegal. Tariffs can raise costs for importers and exporters by changing the price of cross-border trade, leaving companies to decide whether to absorb the hit, pass it on to customers or adjust supply chains.
The recent increase in oil prices threatens Andy Burnham’s cost-of-living drive as he sets out measures he says will give UK households “breathing space”. However, his pledge to boost British high streets received support on Thursday after retail sales rose by one per cent, driven by warm weather and heavy discounting.
Liveblog entries
2:54pm: US stocks slip on open but avoid major losses
12:04pm: Oil eases in boost to FTSE 100
10:08am: Business activity jumps for first time in three months
9:41am: New US tariffs ‘could harm competitiveness’ of key British industries
7:09am: Retail sales jump as warm weather boosts online shopping