London, United Kingdom — Major stock markets mostly rallied and oil prices retreated Thursday on hopes for an end to the war in Ukraine and despite fresh tariff threats.
London was a rare faller owing to sharp losses to share prices of big companies, including Unilever, Barclays and British American Tobacco, on mixed earnings which overshadowed news that the UK economy surprisingly grew in late 2024.
Other markets rose.
US President Donald Trump’s talks with Russian leader Vladimir Putin to start negotiating an end to the war in Ukraine “has fostered a risk-on attitude among investors”, said Naeem Aslam, chief investment officer at Zaye Capital Markets.
The positive showing “is a result of the potential reduction in geopolitical risks”, he added.
With Russia being a major producer of oil, crude futures fell heavily on easing supply concerns, while the dollar lost some of its safe-haven support.
The development surrounding Ukraine helped to ease fears over high US inflation — a situation that risks worsening because of Trump’s tariffs according to analysts.
City Index and FOREX.com analyst Fawad Razaqzada said “risk sentiment wobbled a little… after Donald Trump took to social media with an all-caps declaration that today is the big one: reciprocal tariffs.”
Wall Street opened higher despite the threat of new tariffs and hotter-than-expected wholesale price inflation.
That followed data Wednesday showing annual consumer inflation rose to three percent in January.
The data dealt a blow to hopes that the US Federal Reserve would continue to lower rates this year, having cut three times in 2024, with traders now pricing in just one.
The figures came after Fed chief Jerome Powell on Tuesday warned that policymakers were in no hurry to loosen monetary policy further.
“In our view, the bottom line is clear: the Fed has no reason to cut further. Inflation seems to be stuck above target,” wrote analysts at BoA Global Research.
“The bar for hikes is still high, but they should be part of the conversation after today’s data.”
Soon after the inflation numbers were released, Trump hit out at his predecessor Joe Biden, who he accused of fanning prices.
Trump called for the Fed to lower rates, adding they would “go hand in hand” with his plans to impose tariffs on major US trading partners — despite many economists arguing that both measures would boost inflation.
Among individual stocks, Nestle surged almost six percent in Zurich after the Swiss food giant posted better-than-expected annual sales.
