Author: Fiona Craig

Gold prices edged lower on Tuesday as a firmer US dollar continued to weigh on investor demand, with markets awaiting the Federal Reserve’s latest policy announcement and comments from Chair Kevin Warsh for fresh signals on the direction of interest rates.

Spot gold fell 0.7% to $4,048.40 per ounce by 07:07 GMT, while US Gold Futures also declined 0.7% to $4,049.10. The precious metal had recorded modest gains over the previous two sessions.

Investors Watch Federal Reserve for Interest Rate Signals

The US Dollar Index remained close to its highest level in nearly a month, making gold more expensive for buyers holding other currencies and limiting demand for the safe-haven asset.

Markets widely expect the Federal Reserve to leave interest rates unchanged when its two-day meeting concludes on Wednesday.

Even so, expectations for further tightening have increased in recent sessions. According to the CME FedWatch tool, traders are assigning roughly a 40% probability to a rate increase this week and an 80% chance of another hike in September.

Because gold does not generate interest income, rising interest rates generally reduce its appeal compared with interest-bearing assets.

Investors also remained on the sidelines ahead of several important US economic releases later this week, including second-quarter GDP data and the Federal Reserve’s preferred inflation indicator.

Analysts said gold is likely to remain rangebound until markets receive greater clarity on the outlook for monetary policy.

Iran Talks Ease Geopolitical Concerns

Geopolitical tensions also remained in focus after US President Donald Trump said Washington was holding “good talks” with Iran, while cautioning that military action could resume if negotiations failed.

The temporary suspension of hostilities between the United States and Iran has helped calm concerns over global energy supplies, reducing inflation expectations in recent days.

Oil prices continued to decline during Asian trading, adding further support to the view that energy-related inflation pressures may ease.

Elsewhere, silver dropped 1.8% to $57.387 per ounce, while platinum fell 0.9% to $1,611.60 per ounce.

Industrial metals were also weaker. London Metal Exchange copper futures slipped 0.6% to $13,677.33 per tonne, while US copper futures declined 0.5% to $6.364 per pound.

US stock futures traded mixed on Tuesday as investors prepared for a pivotal week dominated by major technology earnings and the Federal Reserve’s latest policy meeting, while continuing to monitor geopolitical tensions in the Middle East.

At 07:43 GMT, Dow Jones futures edged 0.1% higher, S&P 500 futures slipped 0.3%, and Nasdaq 100 futures lost 0.9%, reflecting continued weakness in technology stocks.

Wall Street ended Monday with mixed results after lower oil prices and easing Treasury yields lifted sentiment following a temporary pause in hostilities between the United States and Iran. Even so, markets remained cautious as investors assessed the risk that higher energy costs could reignite inflation and influence future Federal Reserve policy.

Artificial intelligence remained a major focus. Investors are increasingly questioning whether the enormous levels of spending on AI infrastructure will continue to deliver strong returns, making this week’s earnings reports particularly significant.

Nvidia (NASDAQ:NVDA) came under pressure after reports suggested the company could provide financial guarantees worth approximately $250 billion for a large OpenAI data centre project. Meanwhile, increased competition from Chinese memory chip producer CXMT and reports that Apple (NASDAQ:AAPL) has requested approval to use Chinese-made chips in selected products added further pressure to semiconductor shares.

The Philadelphia Semiconductor Index declined 2.2%, with the Wall Street Journal reporting that every constituent closed below its 50-day moving average for the first time since April 2025.

Investors Await Results From Technology Leaders

The corporate earnings calendar intensifies this week.

Before markets open, Coca-Cola Company (NYSE:KO) and Boeing (NYSE:BA) are scheduled to report quarterly earnings. Investors will assess consumer demand trends at Coca-Cola and continue monitoring Boeing’s operational recovery.

After the market closes, Visa (NYSE:V) will release results that could provide fresh insight into consumer spending patterns, while Seagate Technology (NASDAQ:STX) is expected to offer additional commentary on AI-related demand.

The biggest releases will come from Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN), whose investment in AI infrastructure continues to shape market expectations for the sector.

Federal Reserve Meeting Takes Centre Stage

Markets are also focused on the Federal Reserve’s two-day policy meeting, which concludes on Wednesday with its latest interest rate announcement.

Although recent inflation data has shown signs of easing, volatility in energy markets linked to Middle East tensions continues to cloud the outlook. Meanwhile, the US labour market remains relatively resilient.

According to CME FedWatch, investors currently see roughly a two-thirds chance that the Federal Reserve will keep interest rates unchanged between 3.5% and 3.75%, while a 25-basis-point increase remains a possibility.

Trump and Netanyahu Prepare for White House Meeting

President Donald Trump is expected to host Israeli Prime Minister Benjamin Netanyahu at the White House on Wednesday as diplomatic discussions continue alongside the conflict involving Iran.

While direct military exchanges have paused in recent days, uncertainty remains over the prospects for a lasting ceasefire.

Trump described negotiations with Tehran as “good talks,” while warning that military action could resume if diplomacy fails.

Asian Chip Stocks Extend Global Technology Weakness

Technology shares in Asia also came under heavy selling pressure.

South Korea’s KOSPI fell sharply as semiconductor manufacturers were hit by concerns over AI-related valuations and continued capital expenditure across the industry.

The announcement of new US tariffs on South Korean imports added to investor caution.

SK Hynix Inc (NASDAQ:SKHY) and Samsung Electronics Co Ltd (USOTC:SSNHZ) both recorded steep declines, contributing to the broader weakness across global semiconductor markets.

Essentra (LSE:ESNT) shares surged 17.6% after the industrial components manufacturer published its half-year 2026 results ahead of the London market open, with investors responding positively to stronger revenue growth and an ambitious profitability target that exceeded market expectations.

The company reported first-half revenue of £166.10 million, representing a 9.8% increase at constant exchange rates. Growth was driven by higher sales volumes and improved pricing across all three of its operating regions: EMEA, the Americas and Asia-Pacific.

The results also demonstrated resilient profitability. Adjusted operating profit rose to £18.10 million, while adjusted net income reached £12.20 million. Essentra maintained an adjusted operating margin of 10.9% during the period, but the strongest investor reaction came after management outlined its medium-term objective of increasing the adjusted operating margin to 14% by 2028. The target provided a clearer path for future earnings growth and was widely viewed as the main driver behind the sharp share price rally.

To accompany the results announcement, the company hosted an analyst and investor presentation at the Storey Club in London’s financial district, alongside a live webcast for a broader audience. The event helped maintain investor interest and supported continued buying throughout the trading session.

Earlier this month, RWC Asset Management LLP disclosed an institutional holding in Essentra, suggesting professional investors had been building positions ahead of the earnings release. Meanwhile, broader market conditions remained relatively neutral, with mixed performance across US equity markets and modest weakness in the Nasdaq, leaving company-specific developments as the primary catalyst for the stock’s strong performance.

Overall, the combination of solid financial results, continued revenue growth and a higher medium-term margin target significantly boosted investor confidence, driving Essentra shares sharply higher.

LVMH (EU:MC) shares were expected to open between 2% and 3% lower on Tuesday after the luxury goods group released second-quarter sales figures that left investors unconvinced about the pace of recovery in its most profitable business.

The owner of brands including Louis Vuitton, Dior and Moët & Chandon reported that revenue from its Fashion & Leather Goods division rose 1% on a currency-adjusted basis to €8.90 billion ($10.12 billion). While this marked the division’s first quarter of growth in two years, the result fell short of analysts’ expectations for a 1.7% increase.

The company pointed to softer consumer spending in Europe, where tourism has been affected by the conflict involving Iran, reducing demand in one of its key luxury markets.

“All the focus was on FLG,” a trader said following the results.

Analysts at RBC said the key issue is whether the Fashion & Leather Goods business can still achieve full-year expectations despite facing more demanding year-on-year comparisons in the third quarter. The brokerage added that this would be necessary “for the stock to start working” in its assessment.

Across the group, LVMH delivered 3% organic sales growth during the quarter. However, the results did little to settle concerns over whether the luxury sector is moving convincingly beyond the downturn that has weighed on the industry over the past two years.

“Our thesis for LVMH hinges on the recovery in luxury sector performance and the group’s brands overperforming the industry in the long run,” Morningstar analysts said in a note to clients.

“So far, LVMH is still lagging peers, although trends are turning slightly more positive,” the brokerage added.

Novacyt (LSE:NCYT), the France-based molecular diagnostics specialist, reported first-half 2026 revenue of £11.6 million, representing an 18% increase compared with the same period last year.

The company’s instrumentation business achieved around 30% year-on-year growth, supported by increasing customer adoption of its LightBench Discover platform. Meanwhile, the clinical diagnostics division expanded by more than 20%, driven by continued demand for its non-invasive prenatal testing solutions and sickle cell disease product portfolio.

Southern Cross Diagnostics, which Novacyt acquired in March, contributed £1.8 million in revenue during the period, providing an additional boost to the group’s overall performance.

Geographically, the company delivered solid growth across both the Americas and Asia-Pacific. Revenue in the Americas increased by more than 30%, while Asia-Pacific recorded growth of approximately 22%, with both regions benefiting from stronger instrument sales and continued demand for reproductive health products.

Novacyt is also progressing with its restructuring programme, which is expected to generate up to £4.0 million in annualised cost savings. In addition, the company anticipates receiving IVDR accreditation for its DPYD kit over the coming months, supporting the continued expansion of its diagnostics portfolio.

Man Group (LSE:MAN) shares gained nearly 6% on Tuesday after the alternative asset manager reported first-half earnings and assets under management that exceeded analyst expectations. The results were driven by record client assets, stronger-than-anticipated net inflows and a sharp recovery in performance fee income. Following the announcement, Morgan Stanley said the results suggested modest upside to current consensus earnings forecasts.

The shares rose 5.7% to 317 pence, outperforming a broadly flat FTSE 100 index. Core profit before tax increased to $297 million for the six months ended June 30, compared with $146 million a year earlier, while statutory profit climbed to $201 million from $51 million over the same period.

Core net revenue rose 41% to $853 million, supported by a 21% increase in management fee income to $627 million and more than a threefold increase in performance fees to $207 million. Diluted core earnings per share more than doubled to 19.9 cents, up from 9.7 cents in the prior-year period.

Assets under management reached a record $253.6 billion, rising from $227.6 billion at the end of 2025. The increase reflected $7.1 billion of net client inflows alongside $19.8 billion of investment gains. Man Group said it outperformed the wider alternative asset management industry for inflows, with each of its four investment product categories attracting new client capital.

Analysts at Jefferies said the group’s run-rate management fee income suggests 2026 is tracking around 2% ahead of current market expectations, although the absence of a new share buyback announcement was consistent with forecasts.

Chief Executive Robyn Grew said the results demonstrate the success of the company’s multi-year diversification strategy, highlighting record assets under management and broad-based client inflows as evidence that the business continues to strengthen. She added that Man Group will continue investing in its credit, quantitative equity and multi-strategy capabilities while expanding the use of artificial intelligence to improve productivity and client outcomes.

Morgan Stanley said it expected the results to be well received by investors, citing stronger-than-expected earnings, healthy inflows and broad contributions from performance fees across the business. The broker also pointed to improving momentum across the group’s alternative investment strategies.

The board maintained its interim dividend at 5.7 cents per share. As of July 24, the company had completed $29 million of its existing $50 million share buyback programme.