Author: Fiona Craig

Amazon Web Services (NASDAQ:AMZN) has launched the AWS European Sovereign Cloud, making the new platform generally available as a cloud environment designed exclusively to meet Europe’s data sovereignty and regulatory standards.

The sovereign cloud operates entirely within the European Union and is architected to be both physically and logically isolated from AWS’s other global regions.

Amazon said it plans to invest more than €7.8 billion in the German deployment of the European Sovereign Cloud, an investment expected to support roughly 2,800 full-time equivalent jobs on average each year.

The company also outlined plans to extend the sovereign cloud footprint across the EU, with the first phase of expansion set to include new AWS Local Zones in Belgium, the Netherlands and Portugal.

By offering a dedicated European cloud environment, AWS aims to provide customers with infrastructure that complies with regional data governance and sovereignty requirements, while remaining operationally independent from its global cloud network.

US equity futures traded unevenly on Thursday, with modest gains in contracts tied to the S&P 500 and Nasdaq offset by slight declines in Dow futures. Investor attention centred on comments from President Donald Trump regarding Federal Reserve leadership, blockbuster earnings from chipmaker TSMC (NYSE:TSM), and a fresh round of US bank results due before the opening bell. Oil prices, meanwhile, moved sharply lower amid easing concerns around Iran.

Futures struggle for direction

Wall Street futures hovered close to flat as markets balanced geopolitical headlines against early signals from the earnings season.

At 02:47 ET, Dow futures were down 29 points, or 0.1%, while S&P 500 futures edged up 0.1% and Nasdaq 100 futures gained 0.2%.

The mixed tone followed a weaker prior session on Wall Street, where technology stocks dragged indices lower and investors locked in profits after large bank earnings. US Treasuries found support, pushing yields lower across several maturities, helped by a softer-than-expected producer price index reading and the slide in crude oil.

Trump rules out immediate move against Powell

President Donald Trump told Reuters that he “doesn’t have any plan” to remove Federal Reserve Chair Jerome Powell, despite the Justice Department opening a criminal investigation involving the central bank chief.

Trump added that it was “too early” to decide on next steps, saying the White House is currently in “a little bit of a holding pattern” and that “we’re going to determine what to do.”

Powell’s disclosure that he had received a DOJ subpoena has raised renewed questions about the Fed’s independence. Powell has denied any wrongdoing, arguing that the investigation is intended to influence monetary policy — an area where Trump has repeatedly pushed for faster and deeper interest rate cuts.

When asked whether undermining the Fed’s independence could weaken the dollar or stoke inflation, Trump responded bluntly: “I don’t care.”

Trump also suggested he would favour appointing one of “the two Kevins” — former Fed Governor Kevin Warsh or National Economic Council Director Kevin Hassett — when Powell’s term ends in May. He appeared to dismiss Treasury Secretary Scott Bessent as a potential successor, saying “he wants to stay where he is.”

TSMC delivers record Q4 on AI demand

Taiwan Semiconductor Manufacturing Co. reported a stronger-than-expected fourth quarter, posting record profits as demand for advanced chips used in artificial intelligence applications continued to surge.

The world’s largest contract chipmaker also lifted its outlook for capital expenditure, signalling aggressive expansion plans to keep pace with AI-driven demand. TSMC now expects 2026 capital spending of between $52 billion and $56 billion, up sharply from $40.9 billion in 2025, CFO Wendell Huang said on the post-earnings call.

Huang cautioned that margins could come under pressure over the medium to long term as capacity is built out, particularly overseas. CEO C.C. Wei echoed this view, flagging “significantly higher” capital expenditure and operating costs in the years ahead.

Net profit for the three months to December 31 reached a record T$505.74 billion ($16 billion), comfortably above Bloomberg estimates of T$467.0 billion and well ahead of the T$374.68 billion recorded a year earlier.

Bank earnings remain in focus

Attention now turns to additional US bank earnings, with results from Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) due before markets open.

These releases will cap a busy week for Wall Street’s biggest lenders, following updates from JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. Investors view bank earnings as key indicators of economic momentum and corporate confidence at the start of 2026.

So far, bank executives have described the US economy as resilient, despite uncertainty linked to tariffs, persistent inflation and signs of cooling in the labour market. Combined full-year profits at JPMorgan, Bank of America, Citigroup and Wells Fargo totalled $123.2 billion in 2025, up nearly 5% from 2024, according to the Wall Street Journal.

Oil prices slide as Iran fears ease

Oil prices fell sharply, snapping a five-day rally after Trump struck a more measured tone on Iran, easing concerns over near-term supply disruptions.

Brent crude dropped 3.5% to $64.20 a barrel, while US West Texas Intermediate fell 3.4% to $59.92. The pullback followed a surge of more than 10% over the previous five sessions, when prices hit multi-month highs on fears that unrest in Iran could trigger US military action and disrupt production or shipping routes.

Trump said on Wednesday that he had been told killings linked to Iran’s crackdown on nationwide protests were subsiding and that he believed there was currently no plan for large-scale executions.

Taylor Wimpey (LSE:TW.) said on Thursday that it expects operating margins to face further pressure in 2026, citing a weaker opening order book and softer pricing on bulk home sales.

For 2025, the UK housebuilder now forecasts group operating profit of around £420 million, slightly below its previous guidance of £424 million. The operating margin is expected to decline to about 11%, down from 12.2% in 2024.

The company said that land disposals, supported by good progress on planning and consistent with its long-term strategy, delivered an estimated 60 basis point uplift to the group operating margin in 2025. However, this benefit is not expected to repeat in 2026, removing a key support to profitability.

Home completions for the year reached 11,229, compared with 10,593 in the prior year. Excluding joint ventures, completions totalled 10,614, placing output in the middle of management’s guidance range and ahead of the 9,972 homes delivered in 2024. The average selling price also rose year on year, increasing to £335,000 from £319,000.

Taylor Wimpey said housing demand has yet to show a broad-based recovery following a pre-budget slowdown, with uncertainty around property taxation, regulation and mortgage rates continuing to weigh on buyer confidence. Like other UK housebuilders, the group has been operating in a challenging environment characterised by lower margins and one-off costs.

Commenting on the outlook, Jennie Daly said: “The government’s planning reforms have been welcomed, and we’ve seen increased momentum in our recent planning permissions. However, while affordability is slowly improving, demand continues to be muted – particularly among the important first-time buyer category – which will constrain overall sector output.”

Despite the pressures, full-year revenue rose to approximately £3.8 billion, up from £3.4 billion in 2024, supported by higher completion volumes, improved average selling prices and land sales. Net finance costs for the year are expected to be around £30 million.

Schroders (LSE:SDR) said on Thursday that its full-year 2025 results are now expected to come in ahead of market forecasts, with adjusted operating profit projected at no less than £745 million, up from £603.1 million in 2024. The upgrade, driven by higher income and stable costs, sent the asset manager’s shares up by more than 8%.

The UK-based group said adjusted net operating income is expected to reach at least £2.58 billion, compared with £2.44 billion a year earlier. Management fees benefited in the fourth quarter from a more favourable assets under management mix, supported by strong intermediary net new business.

“Improved income also reflects higher performance fees and carried interest, and positive market returns, including on seed investments,” the company said in its trading update.

Adjusted operating expenses are expected to remain broadly unchanged year on year at around £1.83 billion. Schroders said this reflects continued cost discipline and progress on its transformation programme, adding that it “remain committed to our transformation target of £150 million annualised net savings by the end of 2027.” As a result, the adjusted operating cost-to-income ratio is expected to improve to about 71%, compared with 75% in 2024.

Group assets under management are estimated at approximately £825 billion, including joint ventures and associates, up from £778.7 billion a year earlier. Excluding joint ventures and associates, assets under management are expected to total around £730 billion, compared with £661.8 billion in 2024. Schroders said the increase reflects market appreciation, investment performance and positive net new business of around £11 billion.

Within the divisions, Public Markets generated net new business of roughly £3.9 billion, reflecting “significantly improved flows versus the prior year across both intermediary and institutional channels.” Schroders Capital recorded net new business of about £4.0 billion, rising to around £4.5 billion when including an initial £0.5 billion contribution from Future Growth Capital. Dry powder in the unit increased by around £0.5 billion year on year to approximately £4.7 billion.

Wealth Management delivered net new business of about £3.4 billion, equivalent to a net new business rate of roughly 2.7%. Schroders said this performance came against “a backdrop of continued macro-economic and policy uncertainty,” with Benchmark flows remaining subdued in the fourth quarter. Within Cazenove Capital, UK private client net new business stayed within the group’s 5% to 7% target range, while the charities segment saw negative net flows as strong inflows were offset by a small number of low-margin outflows.

Safestore Holdings Plc (LSE:SAFE) on Thursday posted a resilient operational performance for the year ended 31 October 2025, with total revenue increasing 4.9% to £234.3 million, despite ongoing inflationary cost pressures.

The self-storage group delivered like-for-like revenue growth of 3.1% across its portfolio. UK revenue rose 3.3% to £167.5 million, while Paris revenue increased 2.5% to €52.6 million. The Expansion Markets of Spain, the Netherlands and Belgium continued to outperform, recording a 27% rise in revenue to €26.2 million.

Underlying EBITDAR increased by 1.2% to £137.0 million. However, underlying profit before tax declined 4.2% to £92.9 million, reflecting higher finance costs associated with increased borrowing to support expansion. Adjusted diluted EPRA earnings per share fell 4.7% to 40.3 pence.

During the year, Safestore added 13 new stores and completed one extension, lifting its maximum lettable area by 8% to 9.3 million square feet. This marked the largest organic increase in space in the company’s recent history.

Commenting on the progress, Frederic Vecchioli said: “Safestore is now at an inflection point, where the significant investment we have made in MLA expansion is driving revenue growth and is set to translate into meaningful growth in earnings and long term value creation.”

Reflecting confidence in the outlook, the board proposed a 1% increase in the full-year dividend to 30.70 pence per share, despite the short-term decline in earnings.

Looking ahead, Safestore Holdings Plc expects to return to earnings growth in the 2026 financial year, with first-quarter trading indicating a continuation of the positive trends seen in 2025. The group remains on track to generate £35–£40 million of incremental EBITDA from non-like-for-like stores once they reach stabilisation.

Oxford Instruments (LSE:OXIG) on Thursday reiterated its full-year outlook in a third-quarter trading update, citing robust order momentum that lifted the group’s year-to-date book-to-bill ratio to 1.2x.

The strongest performance came from the Advanced Technologies division, where year-to-date order intake rose 44.5% year on year on a constant currency basis. This marked a notable acceleration from the 25% growth recorded in the first half and has extended order book visibility well into the 2027 financial year.

Momentum also improved within the group’s core Imaging and Analysis division, with third-quarter orders increasing by 2.4%. This represents a turnaround from earlier periods, following declines of 11.4% in the first quarter and 0.5% in the second. The division’s year-to-date book-to-bill ratio now stands at 1.1x, indicating a return to more balanced demand.

Oxford Instruments said cost reduction initiatives implemented during the first half at its Belfast imaging operations are delivering the anticipated benefits in the second half of the year.

The group also highlighted recent balance sheet actions. It completed the sale of its NanoScience business on 2 January 2026, generating net proceeds of £48.5 million after final working capital and debt-like adjustments. In addition, the company finalised a buy-in of its defined benefit pension scheme in December, which will remove pension contribution requirements from the 2027 financial year, compared with an expected £5.25 million contribution in 2026.

Management reaffirmed guidance for the 2026 financial year, with earnings before interest, tax and amortisation (EBITA) expected to be in the range of £70.2 million to £73.0 million, broadly in line with market expectations. Currency assumptions were also unchanged, with foreign exchange anticipated to represent an approximate £5.5 million headwind to EBITA for the year.