Daily market update: Trump's tariffs, gold, FTSE 100, WHSmith, Workspace

Plot out the timeline of policy announcements since Trump returned to the White House and it’s longer than the Bayeux Tapestry.

Financial markets have been subjected to a barrage of heavy-hitting decisions by Trump during his second term, with endless twists and turns. A new tougher stance on tariffs towards parts of Europe in Trump’s quest to own Greenland turns up the heat to max.

Businesses and investors had just started to become comfortable with the new tariff landscape, accepting that supply chains had to evolve, and that goods and services now cost more.

Anyone who thought Liberation Day was shocking is now gasping with their jaw on the floor when looking at what Trump has brought to the agenda in 2026. Trump’s more aggressive stance since the New Year would suggest he’s determined to get what he wants, and that now looks like global domination rather than simply reshaping the US.

Going hostile against Europe had the potential to cause considerable upset on financial markets. While we’ve seen a red day for European shares in general, it’s not panic time. What needs to be watched closely is how markets behave over the near-term. A 1% to 1.5% decline every day over a series of weeks adds up to trouble, and that’s what investors are keen to avoid happening.

Even though no-one knows how markets will behave over the near-term, there are some clues that investors are feeling cautious once more.

Gold has hit a new record high of $4,689 per ounce as investors hide in an asset with supposed haven qualities. Defence stocks continue to be in vogue as investors take the view heightened geopolitical tensions create a stronger earnings backdrop for military and security specialists. Utility stocks were in demand as investors sought to park some of their money in a sector that should tick over whether everything is good or bad in the world.

The omnipresence of gold miners, defence contractors and utility providers on the FTSE 100 explains why the UK blue-chip index fared much better relative to other major European indices. The FTSE 100 only fell 0.2% to 10,215 compared to a 0.9% drop in Germany’s DAX and 1.2% from France’s CAC 40.

Trump proceeding with a threat to raise tariffs on parts of Europe from 10% to 25% could cause major upset to European corporate earnings if US buyers seek more competitively priced products from alternative sources.

This could force European companies to unravel some of the hard work they’ve done to tweak supply chains in response to last year’s tariffs shake-up and contemplate a world where they are far less reliant on the US for business.

There is a big difference between 10% and 25% tariffs as the latter stands to make European goods far less attractive. That doesn’t bode well for European GDP growth.

Investors have shown restraint over the past year at not going into full-blown panic mode. Yes, there have been plenty of wobbles, but markets have quickly found their feet.

US markets are closed for a national holiday on Monday and futures prices imply a weak, but not catastrophic session when Wall Street reopens on Tuesday.

The key area to watch is inflation, as higher tariffs could bring an end to interest rate cuts in the near-term. Central banks raise rates to fight high inflation and Trump’s latest tariff threat has all the right ingredients to stop looser monetary policy in its tracks. Higher rates are generally bad for equity markets.

WHSmith

If any business needed a corporate ‘Mr Fix-it’ right now it’s WHSmith and the appointment of Leo Quinn as executive chair is an interesting one.

Quinn has led previous recovery efforts at De La Rue, QinetiQ and Balfour Beatty. This may give him some credibility as he looks to rebuild trust with WHSmith shareholders bruised by a recent accounting crisis.

The need to restate profits for two financial years, thanks to income in its North American business being logged too early, unsurprisingly led to the exit of WHSmith boss Carl Cowling. It also ruined what was supposed to be a brave new chapter in the WHSmith story after it sold off its UK high street assets to focus on its global travel division.

WHSmith is still under the cloud of being investigated by UK regulators over breaches of listing and transparency rules.

Quinn clearly sees potential in the business, which benefits from a captive audience in airports and railway stations, and the nature of his compensation and a personal investment in the shares means his interests are aligned with investors’.

The size of the package on offer may still raise some eyebrows. However, if Quinn can emulate the 200%-plus total return he achieved during his time in charge at Balfour Beatty, any questions over remuneration are likely to dissipate.

Workspace

The timing may be pure coincidence, but Workspace CEO Lawrence Hutchings is leaving in the middle of a war against activist investor Saba.

Hutchings had only been in the role for just over a year and his exit has the feel of a last-ditch effort to convince the market this is a story worth backing.

The company has traded at a stubborn discount to the value of its assets and Hutchings struggled to make a difference during his time in charge with his ‘Fix, Accelerate and Scale’ strategy not making much headway in the face of refinancing issues and a difficult market backdrop.

The hope will be his replacement Charlie Green can bring some dynamism to the role, having founded and developed Fora (formerly The Office Group) over two decades.  

Saba’s proposal to wind up the company may be difficult to achieve quickly given that selling the company’s distinctive portfolio of London office locations would likely be a time-consuming affair.