Stocks slip as Trump lowers China tariffs and settles rare earths roadblock with Xi Jinping

Here are the FTSE risers and fallers this morning:

Virgin Trains is set to launch rail services through the Channel Tunnel after the UK’s rail regulator approved its application to share a depot with Eurostar.

The decision by the Office of Rail and Road (ORR) means Eurostar’s monopoly on passenger services will be broken for the first time since the tunnel opened in 1994. The ORR said Virgin’s application was more financially viable than the other operators.

Sir Richard Branson’s rail business said it plans to begin services by 2030 after its application was approved.

Temple Mills railway storehouse in east London is the only UK depot able to accommodate the larger trains used in continental Europe and which is already linked to the cross-Channel line.

Sir Richard Branson, founder of the Virgin Group, said:

Meanwhile, rail minister Lord Hendy said he was “incredibly pleased” with the ORR’s decision and called it a “significant step forward”.

Shell (SHEL.L) reported a drop in third-quarter profits, driven by weaker crude oil prices, but said it would keep the pace of its share buyback programme at $3.5bn over the next three months, marking the 16th consecutive quarter of such buybacks.

The oil (CL=F, BZ=F) major posted adjusted earnings of $5.4bn (£4.09bn) for the quarter, exceeding analysts’ expectations of $5.05bn, according to an LSEG-compiled consensus. A separate forecast from the company had anticipated a third-quarter profit of $5.09bn.

This is down from the $6bn Shell reported in the same period last year, but represents a 27% increase from the $4.26bn in the second quarter of 2023.

Adjusted earnings are a closely watched metric that strips out certain commodity-price adjustments and one-time charges.

Income attributable to shareholders rose to $5.3bn from $3.6bn in the previous quarter and $4.3bn a year earlier. Adjusted EBITDA increased to $14.8bn from $13.3bn.

The UK oil major was helped by the start-up of its $40bn liquefied natural gas project in Canada. LNG Canada, which started production in July, is expected to ship 14mn tonnes of liquefied natural gas from Canada’s west coast to Asia each year, equivalent to roughly the annual consumption of Singapore and Vietnam combined in 2024.

Despite the drop in profit, Shell’s performance continues to outperform its industry peers. The company’s London-listed shares have climbed more than 16% year-to-date.

The Bank of Japan (BOJ) kept interest rates steady at 0.5% as widely anticipated, with two members dissenting in favour of a rate increase.

This extends the pause in its tightening cycle to a sixth consecutive meeting after a 25 basis points hike in January.

In its quarterly economic outlook report, the board has slightly adjusted its economic growth forecast for the current fiscal year ending in March 2026 to 0.7% from 0.6%, while maintaining its projections for the subsequent two fiscal years at 0.7% and 1% respectively. Additionally, it has raised its inflation forecast for fiscal 2026.

Simultaneously, the central bank anticipates that underlying inflation will reach 2% in the latter half of the three-year projection period ending in March 2027, retaining the language from the previous report issued in July.

The Japanese yen initially weakened on the back of the news before stabilising to trade flat at 152.71 against the dollar, down just 0,05%.

Traders are digesting a new trade deal between US president Donald Trump and his Chinese counterpart Xi Jinping, this morning,

The two world leaders met in Busan in South Korea, with Trump agreeing to reduce tariffs on China from 57% to 47% in a one-year deal. This was in exchange for Beijing resuming purchases of US soybeans, the continuation of rare earth exports and a crackdown on the trade of fentanyl.

Trump characterized his discussions with Xi as ‘fantastic,’ emphasizing a ‘great relationship’ between the two leaders, while premier Xi noted that both parties had achieved ‘a basic consensus’ despite ongoing differences.

Furthermore, the leaders agreed to collaborate on issues concerning Ukraine and stated their intention to eliminate shipping tariffs and fees.

Today marked the first face-to-face meeting between the two since Trump returned to the White House in January, with Trump stating that he will visit Beijing in April.

“On a scale of one to 10, the meeting with Xi was 12,” he told reporters on route back to the US.

Stocks in Asia were mixed overnight with the Nikkei (^N225) flat on the day in Tokyo, after he Bank of Japan (BOJ) kept interest rates steady at 0.5%, while the Hang Seng (^HSI) fell 0.2% in Hong Kong.

The Shanghai Composite (000001.SS) was 0.7% down by the end of the session and in South Korea, the Kospi (^KS11) added 0.1% on the day.

Across the pond on Wall Street stocks likewise lacked direction. The S&P 500 (^GSPC) ended flat on the day, and the tech-heavy Nasdaq (^IXIC) was 0.6% higher as Nvidia (NVDA) became the first company to reach a $5trn market capitalisation. The Dow Jones (^DJI) lost 0.2% during the session.

On the data front, ahead of the Fed decision last night, US September pending home sales were unchanged versus expectations for a 1.2% rise, though the annual rate did still pick up to a 10-month high of 1.5%year-on-year.

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and happening across the global economy.

To the day ahead, the key event will be the ECB decision, alongside a full slate of European data releases — including Germany’s Q3 GDP, October CPI, unemployment rate, France’s Q3 GDP, Italy’s Q3 GDP and September unemployment, Eurozone confidence data, and the region’s Q3 GDP print.

On the earnings front, highlights include Apple, Amazon, Eli Lilly, Mastercard, and Samsung Electronics.

Here’s a snapshot of what’s on the agenda:

7am: Trading updates: Shell, Standard Chartered, Haleon, WPP, Coca-Cola HBC, Computacenter, Essentra, Filtronic, Gem Diamonds and Spectris

10am: Eurozone GDP

1.15pm: European Central Bank rate decision

9pm: Apple and Amazon quarterly earnings