Category: Market News

UK markets open flat as Bellway lifts completions, Seeing Machines reports record royalties and Brent crude remains sensitive to Iran tensions.

Market Overview

The FTSE 100 opened broadly unchanged, up 0.001 per cent at 10,862.85, while the Euronext 100 was also effectively flat at 1,972.91 and Germany’s DAX edged 0.01 per cent higher to 26,327.10. European markets remained cautious as renewed US-Iran tensions and uncertainty over the Strait of Hormuz kept energy risks in focus, while softer UK retail sales added pressure domestically. Overnight in the US, the Nasdaq closed lower at 26,605.36 and the S&P 500 also declined to 7,753.11, with investors looking ahead to US inflation data and assessing elevated technology valuations.

Commodity markets were softer at the open, with copper, gold, Brent crude and natural gas all declining from their previous closes. Oil nevertheless remained supported by fading hopes of a US-Iran agreement and continuing concerns over flows through the Strait of Hormuz. Bitcoin rose against sterling. Currency moves were limited, with the US dollar, Swiss franc, euro and Japanese yen strengthening marginally against sterling, while the Australian dollar weakened slightly.

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Market Numbers

FTSE 100: Up (0.001%), 10,862.85
Euronext 100: Up (0.001%), 1,972.91
DAX: Up (0.01%), 26,327.10
NASDAQ: Down, 26,605.36
S&P 500: Down, 7,753.11

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In the Headlines

Higher completions and cash – Bellway (LSE:BWY)
The housebuilder reported a 10.8% increase in housing completions to 9,695 homes, while housing revenue rose to £3.14 billion and net cash strengthened to £157.7 million. Stronger cash generation is supporting continued share buybacks, although Bellway remains cautious over subdued demand and housing market conditions.

Record automotive royalties – Seeing Machines (LSE:SEE)
The driver and occupant monitoring technology group reported adjusted revenue growth of 45%, with automotive production volumes rising sharply and royalty revenue more than doubling. The improved revenue mix helped Seeing Machines achieve a profitable second half and move closer to full-year breakeven, supported by growing automotive adoption and European driver-monitoring requirements.

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Currencies (vs GBP)

USD: Up (0.001%), $1.3511
CHF: Up (0.001%), Fr.1.0942
EUR: Up (0.01%), €1.1702
JPY: Up (0.001%), ¥215.0305
AUD: Down (-0.01%), $1.9151
Bitcoin (BTC/GBP): Up, £47,442.65

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Commodities

Copper: Down
Gold: Down
Brent Crude: Down
Natural Gas: Down

U.S. equity futures showed little movement on Tuesday as markets balanced another increase in oil prices against major developments in artificial intelligence and semiconductors, with upcoming inflation figures also keeping investors cautious.

At 03:05 ET (07:05 GMT), Dow futures slipped 51 points, or 0.1%, while futures tracking the S&P 500 and Nasdaq 100 were broadly unchanged.

Stocks had finished lower in the previous session after prospects for reopening the Strait of Hormuz deteriorated, sending crude prices higher. The renewed energy rally raised concerns that more expensive fuel could add to inflationary pressures and make the monetary policy outlook more difficult for central banks.

Treasury yields also moved higher, creating another headwind for equities.

Nvidia financing plan puts AI spending back under the spotlight

Nvidia (NASDAQ:NVDA) confirmed an extensive AI infrastructure arrangement involving financial groups including Apollo, BlackRock, Goldman Sachs and KKR.

The initiative is designed to mobilise more than $500 billion in third-party capital for infrastructure needed to support the continued expansion of artificial intelligence.

Nvidia shares declined more than 2% after the Financial Times first reported the development.

Vital Knowledge analysts described the move as another case of Nvidia “extending its balance sheet to drive AI infrastructure demand.”

The reaction highlights growing sensitivity towards the scale of spending required to support the AI boom. Questions around the sustainability of these investments have weighed on technology sentiment in recent weeks, despite broadly resilient quarterly results from S&P 500 companies.

Iran reparations dispute reduces hopes for rapid agreement

Geopolitical risk remains another major consideration for markets after U.S. President Donald Trump rejected fresh demands from Iran, reducing expectations for an imminent breakthrough in peace negotiations.

Tehran’s proposals included a demand for the United States to pay reparations for damage caused during the conflict, which has continued for more than five months.

Trump said Iranian negotiators had not previously raised the issue and argued that Iran should instead compensate Washington “for all of the people that they have killed and gravely wounded with their roadside bombs and many conflicts.”

The continued diplomatic deadlock has kept the Strait of Hormuz effectively closed, restricting an important route for global energy supplies. Before fighting began in late February, roughly one-fifth of global oil and liquefied natural gas moved through the waterway.

Brent crude futures rose another 1.8% to $89.34 a barrel as traders responded to the reduced likelihood of a near-term agreement.

Riot Platforms rallies after Anthropic identified as data centre customer

Riot Platforms (NASDAQ:RIOT) surged more than 20% in after-hours trading after Anthropic was reportedly identified as the customer behind Riot’s previously announced data centre contract.

Bloomberg reported that the AI company agreed to pay $9.1 billion under a long-term arrangement securing computing capacity as it expands infrastructure for its Claude products.

The contract covers 191 megawatts at Riot’s Rockdale campus in Texas and is scheduled to run until June 2048.

Riot expects $9.1 billion of revenue from the initial contract period. Two five-year extension options could potentially increase total sales to as much as $16.1 billion.

Intel expands equity raise to $20 billion

Intel Corporation (NASDAQ:INTC) completed an upsized $20 billion stock offering as the semiconductor manufacturer seeks additional financial capacity for its manufacturing plans.

The company priced 210.5 million common shares at $95 each, representing a 2.6% discount to its previous closing price. Underwriters also received a 30-day option covering up to another 31.6 million shares.

Intel had initially targeted proceeds of $15 billion before increasing the offering. The company said the funds would be available for general corporate purposes.

Intel shares declined more than 4% on Monday. The stock has nevertheless risen sharply this year as investors assess the company’s plans for substantial spending on manufacturing facilities and advanced chip packaging as it competes with foundry rivals including TSMC.

RBA pauses after 75 basis points of rate increases

The Reserve Bank of Australia kept its benchmark interest rate at 4.35%, matching market expectations after recent inflation figures showed signs of moderation.

The decision was unanimous and follows a cumulative 75 basis points of rate increases this year.

A softer-than-expected second-quarter consumer inflation reading had strengthened expectations for the RBA to hold rates, while policymakers also lowered their inflation projections for the end of 2026.

The central bank nevertheless warned that headline and underlying inflation remain high and could stay elevated in the near term.

Fuel costs associated with the Iran conflict were highlighted as an important source of inflationary pressure, meaning policymakers have not ruled out further interest-rate increases.

European equities hovered around the flatline near record highs as renewed Middle East tensions and another jump in crude oil prices tempered market momentum, while a volatile earnings season increased scrutiny of elevated technology and artificial intelligence valuations.

The pan-European Stoxx Europe 600 Index was little changed, remaining just below its all-time highs. Energy stocks outperformed as crude prices climbed to their highest levels since July 31, while capital-goods companies, media stocks and technology suppliers lagged.

Hormuz negotiations keep markets on edge

The subdued performance across European markets reflects growing sensitivity to developments surrounding the Strait of Hormuz.

Stocks have repeatedly responded positively to preliminary reports of progress in Gulf diplomatic negotiations, only for geopolitical risk to return when discussions encounter political obstacles.

The latest setback followed U.S. President Donald Trump’s response to an Iranian draft proposal with Oman concerning new transit coordinates through the Strait of Hormuz.

Trump pushed for more stringent terms, including demands that Tehran provide direct financial compensation for lives lost in regional conflicts, attacks and protests. The tougher position represents an escalation in rhetoric that could complicate mediation efforts being pursued by Muscat and Qatar.

Brent crude subsequently moved towards multi-week highs above $84 a barrel, adding another source of uncertainty for European investors.

Higher oil prices add pressure during earnings season

The increase in energy costs comes as markets are already dealing with substantial individual stock volatility during the second-quarter earnings season.

European corporate results have produced solid headline beats overall, with healthcare, power infrastructure and defence among the areas providing support.

Technology companies and industrial suppliers, however, are facing greater scrutiny. Mixed results from major global hardware companies have triggered pronounced moves throughout semiconductor supply chains.

Investor attitudes towards artificial intelligence spending are also becoming more selective. Markets are showing greater reluctance to reward large capital expenditure commitments to AI infrastructure when there is limited visibility over how quickly those investments will translate into revenue.

That shift is adding pressure to a technology sector that has been a major contributor to this year’s equity rally.

Investors await U.S. inflation data

Rapid sector rotations are making the environment more difficult for fund managers, who are balancing inflation risks from higher energy prices against signs of slowing global economic growth.

Attention is now turning to Wednesday’s U.S. Consumer Price Index report.

Following last week’s unexpected contraction in U.S. payrolls, investors are looking for clearer evidence that underlying inflation is slowing sufficiently to allow central banks in the United States and Europe to keep monetary policy unchanged through the autumn.

Until there is greater clarity on inflation and shipping through the Strait of Hormuz, European equity markets could remain particularly sensitive to geopolitical headlines, energy prices and company earnings.

UK equities moved modestly lower on Tuesday as renewed tensions between the United States and Iran combined with disappointing British retail sales data to dampen investor sentiment.

As of 03:23 ET (07:23 GMT), the FTSE 100 was down 0.08%. Germany’s DAX declined 0.06%, while France’s CAC 40 fell 0.07%. Sterling was unchanged against the dollar at $1.3501.

Geopolitical risk remained firmly in focus after the Washington Post reported that U.S. President Donald Trump used a decoy operation when leaving Turkiye following the NATO summit on July 8 because of a potential Iranian threat.

According to the report, Trump was covertly transferred by catering truck to a smaller C-32A aircraft, while the traditional Air Force One continued its journey carrying journalists and some White House personnel.

A U.S. official described the situation as involving a “credible threat” from Iran.

A White House spokesperson defended the security measures, saying “there are many enemies of America who have their sights on him, and we use every tool at our disposal to address those threats.”

Tensions surrounding the Strait of Hormuz also remained elevated. Trump told reporters on Monday that the U.S. Navy has “100 per cent control” of the strategically important waterway, describing the blockade as “infallible” and a “steel wall.”

Iran’s Revolutionary Guard Corps, meanwhile, maintained that the Strait would remain a “theatre of war” until Washington meets Tehran’s conditions, including financial restitution.

Trump also reiterated his demand for reparations in a Truth Social post, saying Iran should provide compensation for the “last five month Military Conflict.”

In a separate post, he said Iran “should be responsible for the damages and death caused to the people of Lebanon, Syria, Yemen, and Gaza.”

Weak retail data adds pressure on UK stocks

Domestic economic data provided another headwind after UK retail sales growth slowed considerably in July.

Total sales increased 1.3% year on year, according to BRC-KPMG data, compared with growth of 2.5% a year earlier and below the 12-month average of 1.8%.

Food sales increased 3.8%, helped by the closing stages of the World Cup, but non-food sales declined 0.7%.

“Consumer demand has struggled in the heat, leaving retailers facing a challenging start to the second half of the year,” said Helen Dickinson, chief executive of the British Retail Consortium.

Dickinson added that “household budgets remain stretched” and called on the government to reduce business rates and regulatory costs.

IGD chief executive Sarah Bradbury also warned that “pressures are building across the food supply chain” because of the Middle East conflict and hot weather, creating a risk of “higher food costs” heading into autumn.

Oil prices climb as Middle East risks remain in focus

Energy markets reflected the continued geopolitical uncertainty, with Brent crude rising 2.15% to $89.62 a barrel and U.S. WTI gaining 2.24% to $83.95.

Gold prices were softer. Gold futures slipped 0.02% to $4,418.82, while spot gold declined 0.65% to $4,360.46.

UK stocks in focus

Bellway (LSE:BWY) highlighted uncertainty around near-term housing demand as higher construction costs and moderating consumer demand weighed on the outlook. The housebuilder indicated that operating profit was likely to come in at the lower end of its guidance range.

IHG (LSE:IHG) reported higher second-quarter RevPAR, supported by demand from affluent travellers and activity associated with the 2026 Soccer World Cup.

With geopolitical uncertainty pushing oil prices higher and domestic retail data pointing to softer consumer demand, investors are balancing external risks against company-specific developments as the FTSE 100 trades close to flat.