Category: Market Summary

UK equities moved higher on Wednesday as strength across major mining companies helped the FTSE 100 overcome a fresh rise in domestic inflation and renewed geopolitical uncertainty surrounding the Persian Gulf.

The FTSE 100 gained 0.06% as of 03:25 ET (07:25 GMT), putting London ahead of a mixed performance across continental Europe. Germany’s DAX slipped 0.12%, while France’s CAC 40 advanced 0.24%. Sterling strengthened 0.15% against the US dollar to 1.3552.

Mining Shares Lead London Market Higher

Mining companies provided much of the support for the FTSE 100, with Rio Tinto (LSE:RIO) and Anglo American (LSE:AAL) among the strongest performers. Glencore (LSE:GLEN) and Antofagasta (LSE:ANTO) also advanced as metals stocks participated in a broader resources rally.

The gains came alongside another increase in crude oil prices and continued geopolitical risk surrounding the Middle East, helping commodity-related shares offset concerns generated by the latest UK inflation figures.

UK Inflation Climbs to Four-Month High

UK consumer price inflation accelerated to 2.9% in the 12 months to July, up from 2.6% in June and matching economists’ expectations. It was the first increase in the annual inflation rate since March.

Energy costs were a major contributor, with gas prices jumping 14.7%, their largest monthly increase since October 2022. The rise followed Ofgem’s decision to increase the household energy price cap by £221 to an annual equivalent of £1,862.

Core inflation remained at 2.6%, rather than easing slightly as economists had anticipated. Services inflation provided a more encouraging signal, declining to 3.4% from 3.6%.

The Office for National Statistics noted that this was the first energy price cap assessment period affected by the Middle East conflict, although the resulting inflationary impact remained relatively concentrated rather than spreading broadly through consumer prices.

Capital Economics deputy chief UK economist Ruth Gregory said the figures showed that “underlying inflation remains contained,” pointing to a fourth consecutive monthly decline in food and drink inflation to 1.3%, its lowest level since August 2024.

Analysts See Limited Pressure for Bank of England Rate Hikes

Capital Economics maintained its forecast that the Bank of England will leave interest rates at 3.75% throughout this year before reducing them to 3.00% next year. That outlook remains considerably below market expectations for rates of between 4.25% and 4.50%.

Jefferies strategist Mohit Kumar said weaker employment figures combined with the inflation data “would help to contain BoE hike expectations,” with domestically generated inflationary pressures remaining relatively subdued despite higher energy costs.

However, Capital Economics warned that the delayed impact of elevated energy prices could lift headline inflation towards 3.5% later this year. Manufacturing PMI output-price indicators also suggest core goods inflation could increase from 0.9% towards 3%.

“It will probably be just a matter of time before this filters through into higher CPI inflation,” Gregory wrote.

Iran Disputes Missile Claims as Regional Tensions Persist

Geopolitical concerns remained another influence on markets after Iran rejected allegations that missiles had been launched from its territory towards the United Arab Emirates.

Iran’s Mehr News Agency quoted foreign ministry spokesman Esmail Baghaei describing the UAE allegations as “completely baseless”. He urged regional governments to avoid “unfounded accusations”, referring to what he characterised as a history of false-flag operations involving the US and Israel.

Meanwhile, Iranian Parliament Speaker Mohammad Bagher Ghalibaf, during a visit to Baghdad for regional cooperation discussions, said Islamic countries should strengthen relations “without foreign interference”.

U.S. President Donald Trump said on Truth Social that “there are no talks or conversations going on, or scheduled, with the Islamic Republic of Iran,” while adding that the naval blockade remains “in full force and effect” and that the Strait of Hormuz is “open and operating.”

Separately, Al Jazeera reported that the U.S. administration had instructed negotiators to pause discussions until Tehran is “ready to make a deal.”

Oil Prices Rise as Markets Track Persian Gulf Risks

Energy markets remained sensitive to developments in the region. Brent crude gained 0.62% to $91.59 per barrel, while WTI advanced 0.67% to $84.62.

Precious metals delivered a mixed performance. Gold futures declined 0.28% to $4,408.26, while spot gold increased 0.46% to $4,354.47.

For the FTSE 100, strength among heavyweight mining shares was sufficient to keep the index in positive territory despite the hotter UK inflation reading and persistent geopolitical uncertainty. Investors remain focused on whether rising energy costs will feed more broadly into inflation and alter expectations for the Bank of England’s next policy moves.

FTSE 100 opens flat as UK inflation rises, Trainline faces a CMA probe, Defence Holdings outlines its fund strategy and Brent crude slips.

Market Overview

The FTSE 100 opened broadly unchanged at 10,727.84, down less than 0.01 per cent from its previous close, as gains among miners helped offset concerns after UK inflation rose to a four-month high. The Euronext 100 gained 0.11 per cent to 1,951.77, while Germany’s DAX slipped 0.03 per cent to 26,120.76 as European investors assessed elevated bond yields and awaited comments from ECB President Christine Lagarde and Federal Reserve minutes. Overnight in the US, the Nasdaq closed lower at 26,289.71 and the S&P 500 fell to 7,691.76.

Commodity markets were mixed, with copper and gold lower, Brent crude edging down and natural gas slightly higher. Oil markets remained sensitive to uncertainty over exports through the Strait of Hormuz. Against sterling, the US dollar and Japanese yen weakened marginally, the Australian dollar strengthened slightly, while the Swiss franc and euro were unchanged. Bitcoin was down.

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Market Numbers

FTSE 100: Down (-0.001%), 10,727.84
Euronext 100: Up (+0.11%), 1,951.77
DAX: Down (-0.03%), 26,120.76
NASDAQ: Down, 26,289.71
S&P 500: Down, 7,691.76

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In the Headlines

CMA booking fee investigation – Trainline (LSE:TRN)
Trainline said it will cooperate fully with a Competition and Markets Authority investigation into how certain fees are displayed during its UK booking process. The regulatory scrutiny puts the transparency of booking charges in focus and could result in further changes to how costs are presented to customers.

Defence fund strategy – Defence Holdings (LSE:ALRT)
Defence Holdings CEO Andrew Roughan has explained the rationale behind the company’s £2 million cornerstone commitment to a new defence fund. The investment activates the Investment pillar of its strategy and is intended to give the group equity exposure to defence technology businesses alongside its core commercial activities.

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Currencies (vs GBP)

USD: Down (-0.02%), $1.3537
CHF: Unchanged (0.00%), Fr.1.0995
EUR: Unchanged (0.00%), €1.1693
JPY: Down (-0.01%), ¥215.978
AUD: Up (+0.00%), $1.9116
Bitcoin (BTC/GBP): Down, £47,464.50

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Commodities

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

U.S. equity futures pointed to another negative start on Tuesday as rising Treasury yields and higher crude oil prices threatened to extend Wall Street’s two-session pullback.

Technology stocks were positioned to bear the brunt of the selling, with Nasdaq 100 futures down 1.3%. The weakness came as the yield on the 30-year U.S. Treasury climbed to its highest level in nearly two decades, increasing pressure on growth stocks whose valuations are particularly sensitive to borrowing costs.

Persistent inflation concerns linked to the Middle East conflict have helped push longer-term yields higher, even as recent economic indicators have reduced expectations for an imminent Federal Reserve rate increase.

Oil Rally Complicates the Inflation Outlook

U.S. crude futures advanced another 0.8% on Tuesday after surging 2.6% in the previous session, with investors becoming increasingly doubtful that Washington and Tehran will reach an agreement capable of easing the conflict.

Higher energy prices risk adding fresh inflationary pressure to the U.S. economy and could keep financial conditions restrictive even if the Federal Reserve refrains from raising interest rates.

Daniela Hathorn, Senior Market Analyst at Capital.com noted the increase in treasury yields comes “despite softer recent economic data reducing expectations for an imminent Fed hike.”

“Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital—including debt issuance associated with the AI investment boom,” Hathorn said.

She added, “That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates.”

Major U.S. Indices Extend Recent Pullback

The weaker futures followed Monday’s broadly negative trading session, when stocks struggled for direction initially before selling intensified later in the day.

The S&P 500 fell 40.70 points, or 0.5%, to 7,745.06, closing near its session low and moving further below the record closing high established last Thursday.

The Dow dropped 272.63 points, also 0.5%, to 53,459.78, while the Nasdaq declined 84.25 points, or 0.3%, to 26,644.91.

Monday’s losses extended the modest pullback recorded during Friday’s session.

Iran Rules Out Ceasefire Negotiations

Crude prices accelerated higher as geopolitical tensions surrounding Iran returned to the centre of market attention.

U.S. oil futures gained more than 2% on Monday after indications emerged that Tehran had ruled out talks with Washington to extend a 60-day ceasefire scheduled to expire on Tuesday.

“We did not start any negotiations at all, and the U.S. violated the understanding from the very beginning; therefore, the 60-day issue is not relevant,” Iran Foreign Ministry spokesman Esmail Baghaei said, according to state news agency Tasnim.

Concerns about a broader regional confrontation increased further after President Donald Trump threatened Oman during an interview with Fox News, warning, “If Oman gets in the way, we’ll bomb the s— out of them.”

The comments came as Iran and Oman appeared to be making progress towards an understanding over management of the Strait of Hormuz, one of the world’s most important routes for energy shipments.

Airlines Hit as Energy Costs Rise

Airline stocks were among Monday’s biggest casualties as the jump in crude prices raised concerns about higher fuel expenses. The NYSE Arca Airline Index fell 2.8%.

Software stocks also experienced substantial selling, with the Dow Jones U.S. Software Index dropping 2.7%.

Telecommunications, computer hardware and housing shares were also under pressure, while the market displayed greater resilience in oil producers, biotechnology companies and semiconductor stocks.

The combination of elevated long-term borrowing costs, persistent geopolitical uncertainty and rising energy prices leaves Wall Street facing a difficult backdrop in which financial conditions could tighten even without additional Federal Reserve action.

European equities moved broadly lower on Tuesday as escalating tensions between the United States and Iran unsettled investors, pushed oil prices higher and drove long-dated eurozone government bond yields to multi-year highs.

Brent crude futures climbed above $91 a barrel after U.S. President Donald Trump ruled out extending a temporary ceasefire agreement with Iran. Tehran, meanwhile, said it was preparing to adopt a “fully offensive” military posture, further reducing expectations for an easing of the conflict.

Strait of Hormuz Incident Adds to Market Concerns

Fresh concerns over security in the Middle East emerged after a cargo vessel was struck by a projectile while travelling through the Strait of Hormuz, according to the UKMTO.

The incident added to worries surrounding the safety of commercial shipping through the strategically important waterway, increasing uncertainty around global energy supplies and supporting higher crude prices.

Against this backdrop, European markets remained under pressure. France’s CAC 40 Index declined 0.4%, while Germany’s DAX Index fell 0.3%.

The U.K.’s FTSE 100 Index moved against the broader regional trend, however, gaining 0.2%.

UK Unemployment Holds at 4.9%

Investors also assessed fresh economic figures from the United Kingdom, where the unemployment rate remained at 4.9% in the three months to June, unchanged from the previous period, according to the Office for National Statistics.

The number of job vacancies continued to decline, falling by 6,000 to 707,000 during the three months to July.

Currency markets were relatively subdued, with the U.S. dollar edging higher but remaining close to multi-month lows against major counterparts.

Investors were awaiting several U.S. economic releases later in the session, including import and export prices, housing starts, industrial production and pending home sales.

Basilea Pharmaceutica Surges After Profit Upgrade

Among individual stocks, Basilea Pharmaceutica (TG:PK5) shares surged after the Swiss biopharmaceutical company raised its 2026 profit outlook.

The revised forecast followed a strong first-half performance, with net profit increasing 77% compared with the corresponding period last year.

HgCapital Trust (LSE:HGT), meanwhile, moved lower after the British investment trust announced plans to invest approximately £20 million through its manager Hg in Nourish Care, a nutritional diet consulting platform.

Mining heavyweight BHP (LSE:BHP) traded modestly higher after reporting a 9% increase in annual net profit.

With geopolitical risks driving energy prices and bond yields higher, European markets remained largely defensive as investors monitored developments surrounding Iran and the strategically important Strait of Hormuz.

U.S. stock futures traded lower on Tuesday as markets faced a combination of renewed oil-price pressure, continued disruption in the Strait of Hormuz and the approaching introduction of additional U.S. tariffs on Canadian goods.

Investors were also preparing for quarterly results from Home Depot (NYSE:HD), which will provide another indication of the health of the U.S. consumer. Gold, meanwhile, slipped below $4,400 an ounce as Treasury yields moved higher.

Nasdaq Futures Lead Declines

At 03:05 ET (07:05 GMT), Dow futures were down 49 points, or 0.1%, while S&P 500 futures fell 29 points, equivalent to 0.4%. Nasdaq 100 futures were the weakest of the three, dropping 209 points, or 0.7%.

The moves followed a negative session on Monday, when the major Wall Street averages declined and the S&P 500 recorded its worst trading day of August so far.

“The overall equity mood soured,” analysts at Vital Knowledge said.

Semiconductor stocks provided some relief. Sentiment towards the sector was supported by reports surrounding revenue expectations at Claude developer Anthropic (NASDAQ:ANTP), as well as Nvidia’s (NASDAQ:NVDA) smaller-than-expected financial commitment to an Ohio data centre. Vital Knowledge said the developments helped reinforce enthusiasm surrounding artificial intelligence.

However, Deutsche Bank strategists highlighted the renewed increase in crude prices and the potential inflationary consequences of the Iran war. The move in energy markets was accompanied by higher U.S. government bond yields.

Strait of Hormuz Disruption Keeps Oil Above $90

Brent crude futures rose 0.3% to $91.10 per barrel on Tuesday, while U.S. West Texas Intermediate gained 0.6% to $85.02.

The latest increase followed another incident in the Strait of Hormuz. The United Kingdom Maritime Trade Operations agency said a vessel travelling outbound through the waterway had been struck by an unidentified projectile, damaging its engine room and resulting in a crew casualty.

Political tensions have also intensified after U.S. President Donald Trump ruled out extending the framework ceasefire agreement reached with Tehran in June. The agreement expired on Monday.

Trump said the U.S. had established a back channel with officials from Iran’s Islamic Revolutionary Guard Corps, although Tehran rejected that assertion.

The president also threatened military action against Oman, which has been attempting to negotiate an agreement with Iran to reopen the Strait of Hormuz. Both countries border the strategically important shipping route.

Commercial tanker traffic remains effectively suspended through the strait, which carried approximately one-fifth of global oil flows before the war began in late February.

“With both sides still far apart, investors grew pessimistic that the Strait of Hormuz would properly reopen any time soon,” Deutsche Bank analysts said.

Higher Treasury Yields Pressure Gold

Gold moved below $4,400 an ounce as rising U.S. Treasury yields reduced the appeal of the non-interest-bearing precious metal.

The benchmark 10-year Treasury yield extended its advance as investors considered whether higher energy costs could complicate the Federal Reserve’s inflation outlook.

Markets are awaiting minutes from the Fed’s July meeting for further guidance on interest rates.

Expectations for a possible September rate increase have risen slightly because of inflation concerns linked to the Middle East conflict. Even so, the probability remains considerably lower than it was a week ago following unexpected employment losses, softer consumer inflation and disappointing July retail sales.

Canada Faces Midnight Tariff Deadline

Canada is preparing for another round of U.S. tariffs scheduled to take effect at midnight on Tuesday unless negotiations produce a last-minute agreement.

U.S. Trade Representative Jamieson Greer said any retaliation by Canada would not be “tolerated,” while adding that he expected the longstanding U.S. trading partner to take a “more conciliatory approach.”

Canadian Prime Minister Mark Carney is expected to speak with Trump on Tuesday, according to media reports. Carney has reportedly instructed Canadian negotiators to consider concessions that could prevent the new tariffs while potentially reducing some existing trade barriers.

The Trump administration threatened in July to impose 50% duties on a broad range of Canadian products, including wine, furniture, fishing rods and hockey sticks, invoking a Depression-era law aimed at countries accused of discriminating against U.S. goods.

Home Depot Results Could Shed Light on Consumer Demand

Home Depot (NYSE:HD) is due to report quarterly earnings, beginning a major week for U.S. retail results that will also include Walmart and Target.

The home-improvement retailer warned in May that economic uncertainty surrounding the Iran war, combined with affordability pressures, was discouraging consumers from undertaking major renovation projects.

Home Depot sells products ranging from around $5 to more than $500, while its average customer basket is approximately $90, leaving the business sensitive to changes in discretionary household spending.

CEO Ted Decker previously said customers appeared to be in “reasonably good shape,” although they were delaying larger remodelling projects.

The latest earnings could therefore provide investors with fresh evidence on whether consumers remain cautious about major purchases and home improvement spending.

FTSE 100 edges higher as Made Tech raises guidance, Great Western starts drilling and Middle East risks keep energy markets in focus.

Market Overview

The FTSE 100 opened 0.01 per cent higher at 10,720.85, with energy shares providing support as investors continued to assess risks surrounding the Strait of Hormuz. The Euronext 100 edged 0.01 per cent higher to 1,971.09, while Germany’s DAX fell 0.40 per cent to 26,233.55 as geopolitical concerns weighed on European sentiment. Overnight in the US, the Nasdaq closed lower at 26,644.91 and the S&P 500 declined to 7,745.06.

Geopolitical risk remained the dominant macro theme as fading hopes for progress between the US and Iran kept energy supply concerns in focus. Against sterling, the US dollar, Swiss franc, euro and Japanese yen weakened marginally, while the Australian dollar strengthened and Bitcoin rose slightly. Copper and gold moved lower, natural gas gained, while Brent crude edged down from its previous close despite continuing concerns over Middle East supply.

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Market Numbers

FTSE 100: Up (+0.01%), 10,720.85
Euronext 100: Up (+0.01%), 1,971.09
DAX: Down (-0.40%), 26,233.55
NASDAQ: Down, 26,644.91
S&P 500: Down, 7,745.06

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In the Headlines

Guidance Raised – Made Tech Group (LSE:MTEC)
Government technology specialist Made Tech raised its FY27 guidance after securing a record £40 million government contract. The win strengthens its contracted workload and improves expectations for the current financial year.

Major Drilling Programme – Great Western Mining (LSE:GWMO)
Mineral exploration company Great Western Mining has begun a major drilling programme at its Nevada tungsten project. The campaign marks an important step in evaluating the project’s mineral potential and advancing its exploration strategy.

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Currencies (vs GBP)

USD: Down (-0.01%), $1.3551
CHF: Down (-0.00%), Fr.1.0985
EUR: Down (-0.00%), €1.1699
JPY: Down (-0.00%), ¥215.915
AUD: Up (+0.00%), $1.9063
Bitcoin (BTC/GBP): Up, £47,448.10

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Commodities

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

The FTSE 100 moved higher on Tuesday, outperforming other major European markets as gains in energy and consumer stocks helped London equities withstand escalating tensions surrounding the Strait of Hormuz.

The FTSE 100 advanced 0.16% as of 03:30 ET (07:30 GMT), while Germany’s DAX declined 0.48% and France’s CAC 40 slipped 0.18%. Sterling weakened 0.13% against the US dollar to 1.3526.

London’s relative strength came despite another escalation in the Iran conflict after a vessel travelling through the Strait of Hormuz was struck by an unidentified projectile.

BP and Shell Gain as Oil Prices Firm

Energy companies were among the strongest performers in London. Centrica (LSE:CAN) climbed 2.2%, BP (LSE:BP.) gained 2.1% and Shell (LSE:SHEL) advanced 1.5% as crude prices moved higher.

The UK Maritime Trade Operations said on Tuesday that a vessel travelling outbound through the Strait of Hormuz had been hit by an unknown projectile earlier in the session. The incident damaged the engine room and resulted in one crew casualty, while the remaining crew were receiving assistance from the Omani Coast Guard.

Elsewhere on the FTSE 100, hospitality group Whitbread (LSE:WTB) rose 1.9%, while Marks & Spencer (LSE:MKS) added 1.6%.

Strait of Hormuz Shipping Remains Severely Disrupted

Tuesday’s vessel strike represented the clearest escalation in the region during the session, while commercial shipping through the strategically important waterway remained heavily restricted.

According to Kpler tracking data published on Tuesday, six commodity vessels passed through the strait on Monday, compared with a 10-day average of 11. No very large crude carriers or LNG tankers made the crossing.

The disruption remains particularly significant for global energy markets because of the Strait of Hormuz’s importance as a transit route for oil and liquefied natural gas.

Iran Warns of ‘Fully Offensive’ Military Posture

The latest incident followed another deterioration in diplomatic signals on Monday.

A senior Iranian official told Reuters that Tehran would move to a “fully offensive” military posture, warning that Iranian entities should be prepared for further escalation in the Strait of Hormuz.

The official also said Iran would carry out a “timely and precise” military attack aimed at breaking the US naval blockade if diplomatic efforts failed.

Those comments came as a 60-day memorandum of understanding signed on 17 June to begin negotiations towards a permanent end to the conflict expired without an agreement. Washington explicitly ruled out extending the arrangement.

During a Fox News telephone interview on Monday, Trump said Iran “should put up the white flag of surrender” and warned Oman of military retaliation if Muscat interfered with US positions around the waterway.

Asked separately in the Oval Office whether Washington would extend the memorandum, Trump replied “no.”

Earlier on Monday, Trump wrote on Truth Social that “The number one Goal is, and always will be, that Iran cannot have, in any way, shape, or form, a Nuclear Weapon.”

UK Payrolled Employment Falls by 94,000

Investors were also assessing fresh UK labour-market figures published by HMRC and the Office for National Statistics on Tuesday.

Payrolled employment declined by 94,000 year on year in July to 30.3 million, representing a fall of 0.3%.

Median monthly pay increased 4.2% to £2,642. Health and social work recorded the strongest sectoral pay growth at 5.3%, while education registered the weakest increase at 3.3%.

No ministerial comments accompanied the release.

Oil Gains While Gold Moves Lower

Energy prices edged higher as traders monitored the disruption in the Strait of Hormuz. Brent crude futures rose 0.10% to $90.96 per barrel, while WTI crude gained 0.35% to $84.04.

Gold moved lower despite the heightened geopolitical uncertainty. December gold futures fell 0.32% to $4,458.90 an ounce, while spot gold declined 0.31% to $4,402.89.

The combination of stronger energy shares and modestly higher crude prices helped the FTSE 100 outperform continental European markets, even as investors faced renewed uncertainty over shipping through one of the world’s most important energy corridors.

European equities moved modestly lower on Monday as a series of disappointing economic indicators from China renewed concerns about the outlook for the world’s second-largest economy.

Chinese consumer spending stagnated in July, while urban investment contracted at a faster rate and unemployment increased. The latest figures have added to expectations that Beijing may need to introduce further measures to support economic activity during the second half of the year.

Iran conflict and Hormuz risks remain in focus

Investors were also monitoring the lack of progress towards ending the U.S.-Iran war, with geopolitical tensions continuing to influence energy markets.

Brent crude futures traded around $89 a barrel as renewed fighting in Lebanon and further attacks on tankers in the Strait of Hormuz reduced hopes of an imminent resolution to the conflict.

Against this backdrop, France’s CAC 40 Index declined 0.4%, while the U.K.’s FTSE 100 Index and Germany’s DAX Index each slipped 0.1%.

Mining stocks gain as U.S. dollar weakens

Mining companies were among the stronger performers, with Antofagasta (LSE:ANTO), Glencore (LSE:GLEN) and Anglo American (LSE:AAL) moving higher.

The gains came as the U.S. dollar approached two-month lows following softer retail sales and consumer sentiment figures released on Friday.

A weaker dollar can provide support for dollar-denominated commodities, potentially benefiting shares of major mining groups.

AstraZeneca rises on positive Phase III results

In company news, HIAG Immobilien Holding (LSE:0QU6) advanced after the Swiss property company reported a sharp increase in first-half profit.

AstraZeneca (LSE:AZN) also climbed after the British pharmaceutical group announced positive results from its Phase III SAFFRON trial.

Optima Health (LSE:OPT), meanwhile, fell sharply after the workplace health and wellbeing services provider reported a substantial increase in debt alongside its full-year results.

Investors entered the new week with expectations for an imminent Federal Reserve rate increase fading, leaving U.S. stock futures mixed as attention shifts towards major retail earnings and another round of economic indicators.

Walmart (NYSE:WMT), Home Depot (NYSE:HD) and Lowe’s (NYSE:LOW) are among the prominent retailers due to report in the coming days, potentially providing fresh evidence about the health of U.S. consumer spending.

Away from Wall Street earnings, investors are assessing reports that Anthropic (NASDAQ:ANTP) could generate as much as $200 billion in annual revenue by 2028 as the artificial intelligence company considers a potential IPO. Geopolitical risk also remains prominent after commercial shipping through the Strait of Hormuz slowed dramatically over the weekend.

Fed tightening expectations retreat

U.S. futures showed no clear direction early Monday. At 03:08 ET (07:08 GMT), Dow futures had fallen 26 points, or 0.1%, while S&P 500 futures were 15 points, or 0.2%, higher. Nasdaq 100 futures gained 160 points, equivalent to 0.5%.

The moves followed declines for the major Wall Street averages in the previous session, when unexpectedly weak U.S. retail sales added to evidence of cooling economic conditions.

Applied Materials (NASDAQ:AMAT) contributed to the pressure after an optimistic outlook still fell short of demanding investor expectations. Its shares dropped more than 5%, with the disappointment spilling over into other stocks associated with the artificial intelligence investment cycle.

Deutsche Bank analysts identified signs that markets could be entering a summer lull, noting that the VIX volatility index fell to a 2026 low on Friday. They nevertheless highlighted “challenging August crosswinds playing out in bond markets.”

“Expectations for an imminent Fed rate hike have been pulled back, but this has been accompanied by a significant U.S. curve steepening, with the backdrop of higher oil prices, elevated fiscal deficits, and demand for capital from the AI investment boom putting upward pressure on yields,” the analysts wrote.

Bond investors will receive further signals this week from the minutes of the Federal Reserve’s July policy meeting and preliminary August business activity data.

Corporate results could prove equally important for equities. Alongside Home Depot, investors are preparing for earnings from Target, Lowe’s and Walmart as they assess whether U.S. households are becoming more cautious with their spending.

Anthropic’s potential IPO faces ambitious growth assumptions

Anthropic (NASDAQ:ANTP) expects annual revenue to reach approximately $190 billion to $200 billion by 2028, Reuters reported, citing people familiar with the AI developer’s finances.

Those projections are attracting attention as bankers and investors attempt to determine an appropriate valuation ahead of a possible initial public offering.

The forecast is more than four times Anthropic’s $47 billion revenue run rate disclosed in May, meaning any valuation based on the projection would incorporate substantial expectations for continued expansion.

According to Reuters, bankers and investors are using enterprise value-to-revenue multiples based on financial forecasts extending two years into the future.

Revenue multiples are frequently applied to rapidly growing software companies before their profitability reaches maturity. Looking two years ahead is less conventional, however, reflecting both Anthropic’s rapid expansion and the difficulty of valuing an AI developer facing enormous spending requirements for computing capacity, model development and talent.

Strait of Hormuz traffic virtually stops

Geopolitical tensions remain another important variable for global markets after commercial shipping activity through the Strait of Hormuz fell sharply during the weekend.

Kpler data cited by Reuters showed only five commodity vessels transited the waterway on Saturday, followed by none on Sunday. The previous weekend had recorded 31 crossings.

The slowdown followed attacks on three vessels operated by Abu Dhabi National Oil Company last week, which were reported by the United Arab Emirates.

Prospects for an immediate diplomatic solution have also deteriorated after the U.S. suggested its naval blockade of Iranian ports could continue indefinitely.

The scale of the disruption is particularly significant given the strait’s importance to global energy supplies. Before the U.S. and Israel launched their assault against Iran in late February, more than 130 vessels were crossing the route every day.

Brent crude futures were last 0.1% lower at $88.45 a barrel.

Chinese factories feel pressure from weaker domestic demand

China delivered another softer economic signal on Monday as industrial production growth slowed to 4.5% year-on-year in July.

The figure missed expectations for a 5% increase and represented a slowdown from June’s 5.3% growth rate, according to the National Bureau of Statistics.

Domestic conditions remain challenging for manufacturers. China’s official manufacturing PMI slipped into contraction territory in July, while consumer demand continued to show limited momentum.

Export demand remains a source of resilience, particularly for higher-technology Chinese goods, helping to cushion the broader slowdown in factory output.

Producers are nevertheless facing additional pressure from higher costs caused by disruption across international energy and shipping markets.

Nvidia could deepen AI infrastructure role with SB Energy investment

Nvidia (NASDAQ:NVDA) is considering an investment of up to $3 billion in SB Energy, according to The Information, which cited people familiar with the discussions.

The SoftBank Group-backed company is developing a planned data centre campus in Ohio for OpenAI, and Nvidia’s potential investment would further expand the chipmaker’s involvement in the infrastructure supporting the AI industry.

Separate negotiations between Nvidia, OpenAI and SB Energy reportedly involve the possibility of around $100 billion in credit support from Nvidia for the Ohio project.

Such an arrangement would illustrate how Nvidia’s role in the AI boom is expanding beyond supplying advanced processors and into financing the enormous computing infrastructure required to develop and operate artificial intelligence systems.

No final agreement has been reached, and the terms under discussion could still change. Nvidia is scheduled to report its latest quarterly earnings next week.

FTSE 100 opens flat as Fed rate expectations support sentiment, while Defence Holdings invests £2m and Gattaca reports profit growth.

Market Overview

The FTSE 100 opened broadly unchanged at 10,749.95, down less than 0.01 per cent from its previous close, while the Euronext 100 gained 0.04 per cent to 1,970.69 and Germany’s DAX was 0.02 per cent higher at 26,446.72. European sentiment was supported by falling bond yields and expectations that the Federal Reserve may remain on hold after softer US retail sales data. Overnight on Wall Street, the Nasdaq closed lower at 26,729.16 and the S&P 500 declined to 7,785.76.

Commodity trading was mixed, with copper and gold higher while Brent crude and natural gas moved lower. Oil markets remained sensitive to continuing tensions involving Iran following a strong week for prices. Against sterling, the US dollar and Japanese yen strengthened marginally, the Swiss franc weakened slightly, while the euro and Australian dollar were unchanged. Bitcoin rose against sterling.

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Market Numbers

FTSE 100: Down (-0.001%), 10,749.95
Euronext 100: Up (+0.04%), 1,970.69
DAX: Up (+0.02%), 26,446.72
NASDAQ: Down, 26,729.16
S&P 500: Down, 7,785.76

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In the Headlines

Defence investment – Defence Holdings (LSE:ALRT)
Defence Holdings has committed £2 million to a new UK defence technology fund. The investment increases the company’s exposure to emerging defence technologies as the sector attracts greater strategic attention.

Contract hiring – Gattaca (LSE:GATC)
Gattaca reported growth in profit and net fee income for FY26, supported by contract hiring. The performance highlights the importance of its contract recruitment operations in driving earnings growth.

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Currencies (vs GBP)

USD: Up (+0.00%), $1.3546
CHF: Down (-0.00%), Fr.1.1009
EUR: Unchanged (0.00%), €1.1704
JPY: Up (+0.01%), ¥215.684
AUD: Unchanged (0.00%), $1.9119
Bitcoin (BTC/GBP): Up, £46,806.15

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Commodities

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