Apple Cuts Buyback by $10 Billion on Tariff Fears

Apple reduced its share buyback by $10 billion and warned of $900 million in extra costs this quarter due to US tariffs, as CEO Tim Cook confirmed efforts to shift supply chains away from China. US markets closed higher on Thursday, with Microsoft rising 7.6% and Meta gaining 4.2%, though Apple’s cautious update has tempered sentiment since. Elsewhere, Japan hinted it could use its US Treasury holdings as leverage in negotiations.

Equities

The FTSE 100 closed flat on Thursday, as investors weighed mixed earnings against ongoing hopes that trade tensions between the US and China may ease.

Rolls-Royce shares rose 1.7% after the engineering group confirmed it remained on track to meet its 2025 profit targets, saying it could manage the impact of global tariffs. Lloyds Banking Group fell 2.7% after a 7% drop in first-quarter profit, which it attributed to rising costs and higher impairment charges.

National Grid declined 1.1% following the announcement that CEO John Pettigrew would step down. Whitbread jumped 5.8% after launching a share buyback and reporting strong booking trends for its Premier Inn hotels. Informa added 4.2% after reaffirming its outlook, while Haleon rose 3.3% on an upgraded medium-term profit forecast.

The FTSE 250 rose 1.3%, with Ferrexpo leading gains after surging 22.2% on news of a US-Ukraine agreement giving American firms priority access to Ukrainian mineral deals.

In the US, the S&P 500 rose 0.63%, the Dow gained 0.21%, and the Nasdaq climbed 1.52%. Microsoft led the charge, up 7.6%, after a strong quarterly update and a positive forecast for its Azure cloud business. The gains briefly pushed Microsoft ahead of Apple as the world’s most valuable company. Meta Platforms rose 4.2% after delivering better-than-expected revenue growth, driven by robust advertising sales.

Afterhours, Apple beat Wall Street earnings expectations for its second fiscal quarter, but its Services division missed estimates. CEO Tim Cook said tariffs could add $900 million in costs this quarter, though predicting beyond June is tough due to uncertainty. He also said all U.-bound iPhones will soon come from Indi to avoid higher Chinese tariffs.

Qualcomm fell 8.9% after warning that ongoing trade friction would hurt future revenue. McDonald’s slipped 1.9% after reporting a surprise decline in global first-quarter sales. Eli Lilly dropped 11.7% despite beating earnings forecasts, after CVS said it would stop covering its obesity drug Zepbound on some insurance plans.

After the bell, Amazon shares fell nearly 4% as growth in its cloud division missed expectations.

Forex & Commodities

The Australian dollar rose 0.5% to $0.6412 on Friday, leading gains against the US dollar as signs of easing tensions between Washington and Beijing supported risk sentiment. The New Zealand dollar followed, up 0.4% to $0.5932. Both currencies often respond to shifts in sentiment towards China due to their close trade ties.

Meanwhile, the offshore yuan climbed to 7.2519 per dollar, its strongest level since early April. The euro edged 0.2% higher to $1.1317. The US dollar index dipped 0.2% but remains on track for a third straight weekly gain, with the yen weakening to a three-week low of 145.91 after the Bank of Japan paused rate hikes and cut its growth outlook.

US jobless claims came in higher than expected and US manufacturing activity continued to contract in April. Meanwhile, investors await Friday’s key non-farm payrolls report for further clues on the health of the labour market.

Gold rebounded 0.4% to $3,254.51 an ounce after touching a two-week low. Gold is still on course for its sharpest weekly drop since February, though lower prices and renewed uncertainty around trade talks are prompting some investors back into the metal.

Oil prices also moved higher, buoyed by China's openness to restarting trade discussions with the US Brent crude rose 0.7% to $62.55, and WTI gained 0.7% to $59.67. Markets also responded to US President Trump’s threat of secondary sanctions on Iranian oil buyers.