Trump tariffs target pharma sector as markets weigh Fed policy signals

​​​Pharmaceutical sector faces new tariff pressure

​The pharmaceutical sector came under immediate pressure following Trump's announcement of sweeping new tariffs, including a 100% duty on branded pharmaceuticals. This aggressive trade policy directly targets one of the UK's most important export industries.

AstraZeneca and GlaxoSmithKline (GSK) both slipped in London trading as investors assessed the potential impact on their substantial US operations. The pharmaceutical giants have significant exposure to the American market, making them particularly vulnerable to trade policy changes.

​However, analysts noted that many major pharmaceutical companies already maintain substantial manufacturing operations within the United States. This existing infrastructure could help mitigate some of the tariff impact, though the full implications remain unclear.

​The tariff announcement also extends to trucks, furniture, and cabinets, suggesting a broader trade offensive that could affect multiple sectors.

​FTSE resilience demonstrates market maturity

​Despite the pharmaceutical sector headwinds, the FTSE 100 traded broadly steady, demonstrating remarkable resilience in the face of sector-specific pressures. This performance outpaced some international peers, highlighting the index's diversification benefits.

​The FTSE 250 managed modest gains, suggesting that mid-cap stocks found support from domestic factors. This divergence between large-cap pharmaceutical exposure and broader market performance illustrates the importance of sector diversification.

​Currency markets showed similar stability, with the British pound little changed around $1.33-1.34. This stability came after sharp moves earlier in the week, suggesting that traders are becoming more selective in their reactions to policy announcements.

​Mixed US data complicates Federal Reserve outlook

​US economic data painted a complex picture that has complicated Federal Reserve (Fed) policy expectations. Jobless claims fell to 218,000, indicating continued labour market strength, while gross domestic product (GDP) revisions came in higher than expected.

​These stronger data points fuel doubts about the pace of further monetary easing. Markets had been pricing in more aggressive rate cuts, but improved economic indicators suggest the Fed may adopt a more cautious approach to policy changes.

​Fed commentary reflected this complexity, with the Chicago Fed's Goolsbee warning against cutting rates too quickly. This contrasted with Trump appointee Miran's calls for sharper cuts, highlighting the policy debate within Fed circles.

​Individual company moves drive market dynamics

​Pennon provided positive guidance, with the water utility stating that profit is on track to rise about 60% year-on-year (YoY). Cost savings initiatives and reduced pollution incidents contributed to this improved outlook, demonstrating operational efficiency gains.

​Ceres Power delivered a more cautious update, guiding full-year revenue to around £32 million, well below prior expectations. The clean energy firm announced plans for a business transformation programme, suggesting significant operational changes ahead.

​These divergent company stories highlight the importance of individual stock selection in current market conditions. While sector trends matter, company-specific factors often drive the most significant price movements in volatile periods.

​CarMax's 20% slump after weak results exemplified how earnings disappointments can trigger sharp moves. Meanwhile, Intel surged nearly 9% on reports of talks with Taiwan Semiconductor Manufacturing Co (TSMC), showing how strategic developments can override broader market sentiment.

​Global markets adjust to policy uncertainty

​Asian markets declined following the tariff announcement, with regional stocks sliding as investors reassessed trade policy implications. The reaction demonstrates how quickly global markets can respond to US policy changes.

​Traders trimmed Fed rate cut expectations, lifting the US dollar across major currency pairs. This adjustment reflects the market's recalibration following the mixed economic data and Fed commentary.

​Most S&P 500 sectors declined, though energy managed gains of 0.9% while technology stocks eked out modest advances. This sector rotation suggests investors are becoming increasingly selective about exposure as conditions evolve.