Tariffs and AI steer global markets
The US Supreme Court’s decision to strike down most of President Donald Trump’s global tariffs briefly reintroduced uncertainty to financial markets. Trump’s subsequent announcement of a new 10% tariff cast doubts over existing trade deals and the legal and financial consequences. FedEx was among the first to sue the Trump administration for full reimbursement of the tariffs paid under Trump’s emergency measures.
The disruptive impact of AI remained a source of volatility in software stocks. The financial sector also emerged as another area where AI could drive significant change. AI start-up Anthropic signalled that its technology could prompt a broad overhaul of existing IT solutions and services used by companies in the financial sector. Anthropic soothed the market by stating its intention to work with software and services companies to integrate its Claude chatbot into existing systems rather than replacing them.
In the IT sector, Nvidia’s Q4 earnings report was eagerly awaited by investors. Despite all the attention to AI developments, the stock slightly underperformed the S&P 500 index over the past 6 months. The company delivered a record quarterly revenue of USD 68.1 billion, beating consensus estimates. Its outlook for the coming quarter also exceeded the market consensus on both revenue and margins. Still, concerns linger about the long-term sustainability of the heavy AI-related investment levels.
Several market heavyweights outside the IT sector also reported earnings. European industrial company Schneider Electric showcased the tangible impact of AI. Robust demand from data centres and grid infrastructure customers boosted growth in its energy management division.
The quarterly results of Home Depot were well received. In the past quarter, the world’s largest home improvement retailer reported comparable sales growth and earnings per share above expectations. Although CEO Edward Decker warned that homeowners have rising economic concerns, he expects a strong second half of 2026.
HSBC beat earnings estimates and gave strong guidance for the upcoming quarters on cost savings and tangible equity targets. The strong performance of the stock over the past 12 months has made it the largest European bank by market capitalisation.