Stock market sentiment turning on a sixpence as tariff uncertainty continues: Richard Hunter

The current fallout is also mixed as a result of the ever-changing landscape. The volatility index and US Treasuries both steadied, although the dollar remains out of favour in the face of falling appetite for US assets in general, as well as the more pressing possibility of the economy heading towards recession.

There was some promising news following the release of first-quarter numbers from Goldman Sachs, which reported a jump of 15 per cent in profits, largely driven by market volatility which led to record revenues in its trading divisions. Of equal interest to investors were the outlook comments on current and future trading, where a relatively non-committal statement did little more than recognise a “markedly different” environment in the coming months. At the same time, the IPO market remains listless, while corporate clients’ caution is likely to pervade nearer term.

The incrementally better news has brought back some sense of order to the markets, even though investors remain on high alert for the next potential bombshell from the White House. The main indices have clawed back some of their losses although in the year to date, the Dow Jones remains down by 4.7 per cent and the S&P500 by 8.1 per cent, while the Nasdaq’s fall of 12.8 per cent has led to its remaining in correction territory and significantly away from its record closing high as set in December.

Asian markets were mixed to higher overnight on Monday into Tuesday, with Japanese car companies feeling the benefit of potential tariff reductions. Toyota and Honda saw gains of almost 5 per cent, while there was an overhanging sense of relief around semiconductor shares following the recent announcements. Even so, these markets are also skittish and are likely to remain so until the economic tariff clouds have at least begun to clear.

UK markets edged cautiously ahead after a raft of data suggested some defiant resilience in the domestic economy. The unemployment rate was unchanged, pay growth continued to strengthen and there was an increase in consumer spending in March, attributed to some unseasonally warmer weather. Even so, the possibility remains that some of this spending has simply been brought forward ahead of the tribulations to come and the fact that the FTSE250 remains down by 7.6 per cent this year is evidence of investor caution on prospects.

The read across from Goldmans in the US edged up the price of Barclays once more where, despite the recent turmoil, the shares have risen by 13 per cent over the last week and by 49 per cent over the last year. At its full-year numbers in February, the group attributed 44 per cent of revenues to its US division, which should augur well for its own first-quarter report at the end of the month.

Richard Hunter is head of markets for interactive investor