Daily market update: markets volatile as Trump outlines changes to tariff timeline, Tesla shares wobble

“Countries and regions are bracing themselves for trade letters from the US as the Trump administration moves to the next phase of its tariff regime,” says Dan Coatsworth, investment analyst at AJ Bell.

“Trump might be treating it in the same way as a final notice letter – get your act together and agree to a deal or be put back on the higher tariff rates outlined in the Liberation Day announcement.

“We now have some clarity on how the system will work. Rather than a hard deadline of 9 July where all countries without a trade deal will revert to the higher rates announced on 2 April, the new tariff regime begins on 1 August. More countries are expected to confirm trade deals in the coming days, and extensions are possible beyond the 9 July hurdle for countries where negotiations are deemed to be going well.

“In theory, this clarity – albeit still slightly murky rather than crystal clear – should have had a positive reception from investors as the hard deadline has effectively been pushed back three weeks. However, markets were mixed across Asia and Europe on Monday, with futures prices implying a red day for Wall Street later on.

“What’s troubling investors is Trump potentially moving the goalposts yet again. He has form in constantly coming up with new terms and conditions and has now threatened an extra 10% tariff on countries who align themselves with ‘anti-American policies’ of BRICS nations.

“He also suggests some tariffs could reach up to 70%, greater than the previous maximum amount on the Liberation Day menu. Investors would much prefer one set of rules and for the Trump administration to stick to them.”

Tesla

“Tesla shares continue to be volatile in the wake of Elon Musk’s fallout with Donald Trump. The short-lived bromance has turned into a slanging match, with Trump now calling Musk a ‘train wreck’ and laughing off his plan to launch a new US political party.

“The more Musk and Trump are at loggerheads, the greater the chance of the president taking action that could negatively impact Tesla and SpaceX (the entrepreneur’s other big business). Trump has already threatened to withdraw subsidies and government contracts for these companies.

“Tesla shares were weak earlier this year as investors grew tired of Musk spending all his time on US government work. Investors were frustrated that DOGE duties were distracting Musk from his core job of running the electric vehicle company and they wanted him back behind the wheel. Tesla’s shares jumped when he announced plans to do less for the Trump administration as investors’ wish came true. Now there is a risk they’re losing him again.

“Setting up a new party is going to require hard graft and Musk will have to press the flesh to convince people to support his political ambitions. That suggests leadership is back on the priority agenda for Tesla’s board meetings, questioning if Musk can do both politics and business. The answer could be heavily influenced by the direction of the share price.”

Shell

“Shell’s latest quarterly results teaser has created trepidation that the numbers will be a dud.

“The company has cut the upper limit on its guidance for second-quarter gas and LNG output and downwardly revised expectations for its trading division. Shell will be announcing its upcoming earnings amid considerable volatility in the energy market and the wider global economy.

“Shell is looking to achieve a 4% to 5% per year increase in LNG sales over the next five years and a 1% annual increase in production. One quarter can be kept in perspective but if it becomes a trend then shareholders may get twitchy about the viability of these targets.

“The news elsewhere is mixed and the chemical and products arm is not expected to break even thanks to unplanned maintenance at a US facility.

“Shell may face further questions when it unveils its results in full later this month about its intentions with regards to BP. Despite widespread speculation, Shell has denied it has any intention of merging with its stricken counterpart, but the story refuses to go away as BP’s struggles continue.”