Category: Market Summary

European equities moved modestly higher at the start of the week as declining government bond yields and a weaker U.S. dollar improved risk appetite, with investors increasingly expecting the Federal Reserve to keep interest rates unchanged at its September meeting.

The pan-European Stoxx Europe 600 Index gained 0.2%, recovering some ground after ending a four-week winning streak on Friday. Among the major regional markets, Germany’s DAX advanced 0.2%, France’s CAC 40 was broadly unchanged and London’s FTSE 100 climbed 0.4%.

European sovereign bond yields retreated from the multi-week highs reached recently, providing some relief to equity markets. The move was particularly supportive for growth-oriented sectors, which tend to be more sensitive to changes in borrowing costs and discount rates.

At the same time, the U.S. dollar weakened against major currencies as investors reduced expectations for further near-term Federal Reserve tightening.

Weak U.S. data pushes Fed pause probability towards 70%

Money markets are now pricing in approximately a 70% chance that the Federal Reserve will leave its benchmark interest rate unchanged at its September policy meeting.

Expectations have shifted following a series of softer U.S. economic releases that have weakened the argument for additional monetary tightening in the near term.

Investors have recently digested several important data points, including a weaker-than-expected July employment report showing a contraction in payrolls, Consumer Price Index figures that met expectations, a flat Producer Price Index reading and an unexpected 0.6% month-on-month decline in July retail sales.

Taken together, the figures have reduced concerns that inflationary pressures will require an immediate policy response. That has encouraged expectations that the Federal Reserve can maintain its current policy stance for longer while assessing the direction of the U.S. economy.

For equity markets, the possibility of an extended pause has provided support by reducing fears of another increase in borrowing costs.

Sparse European calendar keeps global risks in focus

Europe’s economic calendar is unusually quiet this week, leaving regional equity markets more dependent on developments in the global economy, bond markets, currencies and commodities for direction.

Several risks that influenced trading throughout August nevertheless remain unresolved.

One of the most significant is the continuing disruption to shipping through the Strait of Hormuz. Diplomatic negotiations between Washington and Tehran over commercial transit remain deadlocked, keeping crude oil prices elevated and maintaining pressure on input costs for energy-intensive European companies.

European equities have already enjoyed a strong summer rally that brought several benchmarks close to record highs. As a result, strategists remain divided over whether equity risk premiums have become too compressed relative to persistently high real borrowing costs.

The second-quarter earnings season is also largely complete. The succession of better-than-expected corporate results that supported European stocks through late July has therefore faded, leaving macroeconomic developments as a more important driver of market direction.

Markets turn to U.S. PMIs and Jackson Hole

Attention is now shifting towards upcoming U.S. economic indicators that could provide the next significant catalyst for global markets.

S&P Global’s preliminary August Purchasing Managers’ Index readings for U.S. manufacturing and services are due later this week. They will be followed by the Federal Reserve’s annual Jackson Hole Symposium the following week.

Investors will examine the data for evidence that economic activity is cooling at a controlled pace. A gradual slowdown would strengthen expectations for a soft landing while supporting the case for the Federal Reserve to keep rates unchanged.

Markets will also be watching closely for any signs that inflationary pressures are rebuilding, which could challenge the increasingly widespread expectation of an extended policy pause.

UK equities moved higher on Monday as weaker-than-expected U.S. retail sales reduced expectations for further near-term monetary tightening by the Federal Reserve, allowing London’s blue-chip index to recover some ground after falling 1.4% last week.

The FTSE 100 gained 0.26% as of 03:25 ET (07:25 GMT). Elsewhere in Europe, Germany’s DAX slipped 0.03%, while France’s CAC 40 edged 0.05% lower. Sterling strengthened 0.22% against the dollar to $1.3562.

Sentiment received support from U.S. retail sales data showing a 0.6% month-on-month decline in July. Economists had expected an increase of 0.1%, while the contraction was the steepest monthly fall since May 2025.

The disappointing figures pushed U.S. Treasury yields and the dollar lower on Friday as investors scaled back expectations for tighter Federal Reserve policy, providing a more supportive backdrop for equities at the beginning of the new week.

U.S.-Iran tensions keep Hormuz risks in focus

Geopolitical uncertainty remained a significant consideration for markets. Speaking at Market Regulation Headquarters on Sunday evening, Iran’s vice president said Tehran would be successful in its “economic warfare” as Washington prepared to announce another round of sanctions this week.

Shipping activity through the Strait of Hormuz remained severely restricted. Ship-tracking company Kpler recorded no commodity vessel crossings on Sunday and only five on Saturday, compared with 31 during the previous weekend.

The 60-day memorandum of understanding between the U.S. and Iran, agreed in June to halt hostilities, expired on Monday without discussions taking place over an extension. Tehran has maintained that Washington must first meet its obligations under the original agreement.

Regional security arrangements have also moved into focus. Saudi Arabia, Turkiye and Pakistan signed the Mecca Joint Defence Agreement on Aug. 7, establishing collective-defence provisions. Washington welcomed the agreement, while Turkish President Erdogan said the pact had “sent an important message to the world” and described Egyptian participation as “possible.”

Jefferies analysts said on Monday that they saw no simple route towards resolving the confrontation, characterising the current situation as “no war and no peace” while the Strait of Hormuz remains closed.

“The only possibility remains a fudge or look the other way arrangement by which some traffic can start to flow through the Strait while the US and Iran try to negotiate a deal,” strategist Mohit Kumar wrote in a morning note.

Jefferies said the fragile truce could potentially survive until the U.S. mid-term elections before the threat of renewed escalation increases. From a market perspective, the broker said a crucial question is how far oil prices could rise before Washington becomes willing to make concessions.

The firm also noted that Europe and Asia are more vulnerable than the United States to an extended disruption in the Strait because of their greater dependence on imported energy supplies.

UK housing market remains under pressure

Domestic housing figures added to the cautious UK economic backdrop. Asking prices fell 2% month-on-month in August to an average of £364,999, according to a media report citing Rightmove data.

The decline was the largest recorded for August since 2018. Prices were also 1% lower year-on-year, representing the steepest annual decline since December 2023, while the number of homes available for sale reached a 12-year seasonal high.

Rightmove lowered its forecast for house prices across the whole of 2026 to a range of 0% to minus 2%, compared with its previous expectation for growth of 2%.

“The mini Burnham bounce and some renewed general optimism have brought a degree of improvement,” Rightmove’s Colleen Babcock was quoted as saying, “but whether that develops into a more sustained recovery will likely depend on confidence, mortgage rates and the new chancellor’s first budget this Autumn.”

Oil slips while gold moves higher

Energy prices edged lower as investors continued to assess the geopolitical outlook. Brent crude fell 0.30% to $88.26 a barrel, while WTI declined 0.70% to $80.90.

Precious metals moved in the opposite direction. Gold futures advanced 0.36% to $4,453.35 an ounce, while spot gold gained 0.46% to $4,397.18.

UK round up

AstraZeneca (LSE:AZN) discontinued its Phase III eVOLVE-Lung02 study after an independent review concluded that the combination of volrustomig and chemotherapy was unlikely to achieve its progression-free survival or overall survival endpoints when compared with pembrolizumab plus chemotherapy.

The trial enrolled 895 patients and identified no new safety signals. AstraZeneca said its other Phase III studies evaluating volrustomig will continue as planned.

Market Overview

UK and European markets were little changed in early trade on Friday, with the FTSE 100 opening at 10,772.54, fractionally below Thursday’s close, while the Euronext 100 edged up to 1,975.08 and Germany’s DAX advanced to 26,445.99 at the open. Wall Street had closed higher overnight, with the Nasdaq Composite ending at 26,803.03, up 0.81 per cent, and the S&P 500 finishing at 7,798.99, up 0.65 per cent, as investors weighed easing US inflation pressure against renewed tension in the Gulf. Flat US producer price data reduced expectations of further Federal Reserve tightening, while attacks on tankers in the Strait of Hormuz and a US threat of an indefinite naval blockade of Iran kept energy markets alert to supply risk.

Commodity markets reflected the same Gulf-driven caution, with Brent crude and natural gas both firmer at the open and gold ticking higher as a safe-haven hedge, while copper eased alongside broader softness in base metals. Bitcoin retreated against sterling to £46,599.41, down 1.58 per cent, as risk appetite cooled. Currency moves were modest, with sterling little changed against the dollar, euro, Swiss franc, yen and Australian dollar overnight, leaving the pound broadly steady ahead of further inflation data and developments in the Middle East.

---

Market Numbers

FTSE 100: Down (-0.001%), 10,772.54
Euronext 100: Up (+0.007%), 1,975.08
DAX: Up (+0.56%), 26,445.99
NASDAQ: Up (+0.81%), 26,803.03
S&P 500: Up (+0.65%), 7,798.99

---

In the Headlines

Profit Jump – Aviva plc (LSE:AV.)
Aviva’s first-half operating profit rose 24 per cent to £1.33 billion, driven by strong growth in general insurance and continued integration of Direct Line, with cash remittances up 47 per cent to £1.50 billion. The results reinforce confidence in the group’s 2028 targets and underline robust demand across UK personal lines.

Cygnus Timetable – Central Asia Metals plc (LSE:CAML)
Central Asia Metals has set out the timetable for its proposed all-share acquisition of ASX-listed Cygnus Metals, with a shareholder vote due on 4 September and completion expected in early October. The deal would add further development and exploration assets to CAML’s existing Kazakhstan and North Macedonia operations, broadening its base metals portfolio.

Currencies (vs GBP)

USD: Up (+0.00%), $1.349
CHF: Up (+0.00%), Fr.1.0983
EUR: Down (-0.02%), €1.1696
JPY: Down (-0.00%), ¥215.0815
AUD: Up (+0.00%), $1.9098
Bitcoin (BTC/GBP): Down (-1.58%), £46,599.41

Commodities

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

U.S. stock futures were largely flat on Friday as investors weighed easing inflation pressures against a fresh batch of technology earnings, renewed semiconductor volatility and persistent geopolitical risks in energy markets.

Applied Materials (NASDAQ:AMAT) delivered stronger-than-expected fourth-quarter revenue guidance, but its shares still fell in extended trading as investors judged the outlook against lofty expectations for AI-related companies.

At the same time, Semiconductor Manufacturing International Corp rallied after reporting a sharp improvement in second-quarter revenue and profit, while oil prices moved higher amid uncertainty surrounding the Strait of Hormuz.

U.S. futures little changed after Wall Street gains

By 03:18 ET (07:18 GMT), Dow futures were down 72 points, or 0.1%, while S&P 500 and Nasdaq 100 futures were broadly unchanged.

Wall Street’s main indices had advanced on Thursday, supported by another wave of results from companies linked to artificial intelligence spending.

Vital Knowledge analysts noted that several AI-exposed businesses, including Cisco Systems and Cerebras Systems, saw their shares fall despite quarterly updates because expectations had become particularly demanding.

Sandisk (NASDAQ:SNDK) also struck an optimistic tone at an analyst event, forecasting mid-to-high-teens percentage revenue growth between fiscal 2028 and 2030, helped by longer-term AI demand.

Meanwhile, softer annual producer price inflation in July strengthened expectations that the Federal Reserve could keep interest rates unchanged at its September meeting rather than resume tightening.

Applied Materials outlook fails to satisfy elevated expectations

Applied Materials forecast fourth-quarter revenue of around $10.25 billion, plus or minus $500 million, exceeding market expectations as investment in AI infrastructure continues to support demand for advanced semiconductor manufacturing equipment.

The rapid build-out of AI computing infrastructure has increased demand for both sophisticated chipmaking tools and additional wafer capacity, providing a strong backdrop for semiconductor equipment suppliers.

Applied Materials said it is also working to expand manufacturing capacity to meet customer demand.

Even so, the shares fell more than 5% in extended-hours trading as investors focused on whether the company’s guidance was strong enough relative to already elevated Wall Street forecasts.

SMIC earnings surprise drives shares higher

Semiconductor Manufacturing International Corp posted a strong second quarter, with revenue climbing 36.1% year on year to $3.01 billion.

Profit attributable to shareholders surged 261.7% to $479.2 million, while gross margin improved to 25.3% from 20.4% a year earlier.

Wafer shipments increased 20.1% and capacity utilisation rose to 93.7% from 92.5%.

For the third quarter, SMIC expects revenue to grow 2% to 4% sequentially, with gross margin forecast between 26% and 28%.

Management said AI-related industrial momentum should continue to support broad semiconductor demand during the second half, while the company plans to speed up qualification of newly added production capacity.

Oil advances as Hormuz risks remain unresolved

Oil prices rose on Friday and were on track for their first weekly gain in three weeks as uncertainty over U.S.-Iran tensions and Persian Gulf shipping continued to support a geopolitical risk premium.

Brent crude futures gained 1.6% to $88.43 a barrel, while U.S. West Texas Intermediate advanced 1.9% to $82.72 by 03:36 ET. Both benchmarks were up roughly 5% for the week.

The rally was partly restrained by weaker demand forecasts from major industry bodies and a larger-than-expected increase in U.S. crude inventories.

The Strait of Hormuz remained a key source of uncertainty, with Washington and Tehran making conflicting claims over control and commercial access.

U.S. Treasury Secretary Scott Bessent said Washington would impose “measures like have never been seen in the history of economic isolation on a country.”

Workday jumps on Silver Lake takeover report

Workday (NASDAQ:WDAY) shares surged 25% on Thursday after Reuters reported that private equity firm Silver Lake was holding discussions over a possible acquisition of the software company.

The talks have reportedly taken place over recent months, although negotiations remain ongoing and there is no certainty that a deal will be completed.

A potential acquisition would likely value Workday above its roughly $43 billion market capitalisation and could rank among the largest software buyouts on record.

Before the report, Workday shares had fallen around 15% year to date and more than 40% from their 2024 peak.

Reuters said neither Silver Lake nor Workday responded to requests for comment.

European equities were little changed on Friday and remained on track for a modest weekly decline as investors balanced a strong corporate earnings season against rising oil prices and continued uncertainty surrounding the U.S.-Iran conflict.

The STOXX 600 edged 0.05% higher to 659.65 by 0710 GMT, keeping the index close to record levels despite losses earlier in the week.

Corporate earnings have provided underlying support, with second-quarter profit forecasts for Europe’s blue-chip companies rising for an eighth consecutive week. Aggregate earnings across the STOXX 600 are now expected to increase 23.4%, driven particularly by strong growth in the energy and materials sectors.

Iran tensions keep pressure on sentiment

Geopolitical developments continued to limit risk appetite as efforts to resolve the U.S.-Iran conflict remained stalled.

Oil futures gained around 1% to $87.93 a barrel after the United States threatened an indefinite naval blockade of Iran, renewing concerns about potential disruption to global crude supplies.

Negotiations between Washington and Tehran remained deadlocked, with increasingly firm rhetoric from both sides reducing expectations of an imminent resolution.

Meanwhile, softer U.S. consumer and producer inflation readings released during the week reinforced expectations that the Federal Reserve could avoid further aggressive monetary tightening.

Investors were also awaiting euro zone employment and GDP figures scheduled for 0900 GMT for further indications about the health of the regional economy.

Technology leads while basic resources retreat

European technology stocks led sector gains, advancing 1.4%, while basic resources represented the weakest part of the market with a decline of 1.6%.

Company-specific news was relatively limited as the European earnings season moved towards its conclusion, leaving macroeconomic and geopolitical developments as the main drivers of market sentiment.

Oil heads for first weekly gain in three weeks

Energy markets remained one of the biggest obstacles to a broader European equity rally.

Crude oil was on course for a weekly increase of around 4%, putting prices on track to end a two-week losing streak after a volatile period of trading.

Brent crude moved back towards multi-week highs as Washington adopted a more aggressive stance towards Tehran.

The United States threatened to intensify maximum economic pressure against Iran, including the possibility of maintaining a naval blockade if commercial shipping access through the Strait of Hormuz is not restored.

The escalation reduced hopes for an immediate peace agreement and maintained pressure on European industries vulnerable to higher energy and raw material costs.

Investors digest heavy week of economic data

European markets also absorbed a series of important economic releases during the week.

UK gross domestic product expanded 0.4% during the second quarter, matching expectations, while Germany’s final July consumer inflation figures confirmed that annual inflation accelerated to 2.8%.

In the United States, July consumer prices increased 3.4% year on year, in line with expectations, while the headline Producer Price Index was unchanged from the previous month.

Combined with the unexpected contraction in U.S. payrolls reported the previous week, the softer inflation signals helped reduce concerns that the Federal Reserve would need to tighten monetary policy aggressively heading into the autumn.

Money markets subsequently lowered the implied probability of a 25-basis-point Fed rate increase in September to around 35%, compared with almost 67% a week earlier.

The reduction in interest-rate risk provided some support for equities, although continued disruption in energy markets prevented a more substantial rally. With Persian Gulf tensions unresolved and the European earnings season winding down, investors remained cautious even as major indices traded close to record highs.

Energiekontor falls while NKT rallies

Among individual stocks, Energiekontor (TG:EKT) dropped 15% after lowering its full-year outlook.

NKT (TG:NKT) moved sharply in the opposite direction, gaining 10% after raising its annual guidance.

European software shares moved sharply higher on Friday after Reuters reported, citing people familiar with the matter, that private equity firm Silver Lake is holding discussions over a potential acquisition of Workday (NASDAQ:WDAY).

A transaction involving the human resources and financial management software provider could become one of the largest software buyouts ever completed. Silver Lake and Workday have reportedly been discussing a possible deal in recent months, although negotiations remain ongoing and there is no certainty that an agreement will be reached.

German and European software shares surge

The takeover report triggered widespread gains across the European technology sector. By 04:01 ET (08:01 GMT), SAP (TG:SAP) had climbed 4.7%, TeamViewer (TG:TVM) was up 6.8% and Nemetschek (TG:NEM) had surged 8.8%.

Elsewhere, Capgemini (EU:CAP), Dassault Systemes (EU:DSY), Temenos (TG:TE8N) and Wolters Kluwer (EU:WKL) advanced between 2.5% and 4.5%.

OVH (EU:OVH) and Sopra Steria (EU:SOP) both gained 2.7%, while Planisware (EU:PLNW) rose 3.4%, reflecting a broader reassessment of valuations across the software industry.

UK technology stocks join the rally

The positive sentiment extended to London-listed technology and software-related companies.

Softcat (LSE:SCT) gained 1.6%, Bytes Technology (LSE:BYIT) advanced 1.9% and Sage (LSE:SGE) jumped 4.5%.

RELX (LSE:REL) climbed 3.3%, while Kainos (LSE:KNOS) added 4.2%, as investors responded to the possibility that private equity interest could highlight value across the wider software sector.

Workday surges as potential deal attracts attention

Workday shares jumped almost 18% following the report. The company had a market capitalisation of approximately $43 billion before the news emerged.

Workday shares had closed at $206.45 on Thursday, corresponding to a valuation of around $51.1 billion.

Given the potential size of any transaction, Silver Lake could seek additional investors to participate in financing the acquisition, according to the report.

Citi sees potential catalyst for software valuations

Citi analysts said the reported interest from Silver Lake could renew investor attention on software companies and encourage the market to reconsider concerns about disruption from artificial intelligence that contributed to the sector’s recent selloff.

The analysts noted that application software businesses have generally continued to produce resilient financial results despite the rapid development of AI technologies.

Citi also argued that current software valuations continue to reflect a “growth-cratering” scenario, even though the number of companies that could realistically become potential “go private” candidates may be relatively limited.

The Workday report therefore provided a fresh catalyst for investors to reassess whether recent declines across software stocks have adequately reflected their underlying financial performance and longer-term growth prospects.

The FTSE 100 edged lower on Thursday as weakness across major mining stocks outweighed support from softer U.S. inflation data, while continuing disruption around the Strait of Hormuz kept energy markets and geopolitical risks firmly in focus.

The FTSE 100 was down 0.10% at 03:28 ET (07:28 GMT). Elsewhere in Europe, Germany’s DAX gained 0.61%, while France’s CAC 40 advanced 0.03%. Sterling strengthened against the U.S. dollar, with GBP/USD rising 0.13% to 1.3504.

Miners weigh on London market

Mining and commodity-related shares were among the biggest sources of pressure on the FTSE 100 as base metal prices retreated.

Antofagasta (LSE:ANTO) led the decline, falling 3.9%, while Endeavour Mining (LSE:EDV), Fresnillo (LSE:FRES), Glencore (LSE:GLEN), Anglo American (LSE:AAL) and Rio Tinto (LSE:RIO) also traded lower.

The losses followed weaker metals markets, with copper falling 0.21%, nickel declining 0.39% and aluminium slipping 0.28%.

Softer U.S. inflation reduces rate hike expectations

The decline in metals came despite U.S. producer price data providing a more supportive signal for global markets.

Producer prices were unchanged in July, below expectations for a 0.2% increase. Annual producer price inflation also slowed to 4.7% from 5.5% in June.

Following the data, Fed funds futures indicated an approximately 35% probability of another Federal Reserve interest rate increase, compared with around 55% a week earlier.

Lower expectations for additional monetary tightening would typically support risk assets, but the impact on UK equities was overshadowed by commodity-specific weakness and continuing uncertainty surrounding Gulf shipping routes.

Strait of Hormuz tensions keep oil markets on edge

Energy security remained a major focus after the UAE’s Foreign Ministry strongly condemned an attack on two ADNOC tankers travelling through the Strait of Hormuz. No injuries were reported in the incident.

Separately, oil from the Russian-flagged tanker Caroline Bezengi has reportedly reached the coastline of Oman. The vessel was carrying more than 800,000 barrels of sanctioned crude when it was attacked several weeks ago.

The developments followed comments from U.S. War Secretary Pete Hegseth that Washington could maintain its naval blockade of Iranian ports indefinitely through the rotation of vessels.

U.S. President Donald Trump separately claimed that the U.S. had total control of the Strait of Hormuz. Iran’s Persian Gulf Strait Authority rejected that position and maintained that the waterway would remain blocked until Tehran’s conditions were satisfied.

The continuing uncertainty surrounding one of the world’s most important energy shipping routes kept upward pressure on crude prices.

Oil rises while gold retreats

Brent crude gained 1.46% to $88.35 a barrel, while U.S. West Texas Intermediate advanced 1.77% to $82.69 a barrel as traders continued to price in supply risks linked to disruption around Hormuz.

Precious metals moved in the opposite direction. Gold futures declined 0.68% to $4,390.25 an ounce, while spot gold fell 0.39% to $4,334.28.

UK company round-up

BP (LSE:BP.) was in focus after Venezuelan officials signed an agreement involving the British energy major, Abu Dhabi National Oil Company-owned investment company XRG and the oil and gas division of Qatar’s UCC Holding to develop the offshore Loran gas field, according to oil minister Paula Henao.

Aviva (LSE:AV.) also attracted attention after the insurer exceeded first-half profit expectations. Earnings benefited from the integration of motor insurer Direct Line alongside strong growth within Aviva’s wealth management operations.

Wall Street looked set for a slightly firmer start on Thursday as a steep decline in crude oil prices helped improve investor sentiment following Wednesday’s mixed session. U.S. crude futures dropped around 2.3%, easing some of the inflation concerns created by the recent energy rally, although a sharp premarket decline in Cisco Systems (NASDAQ:CSCO) provided a counterweight to the more positive backdrop.

Oil sell-off offers relief to equity markets

The sharp reversal in crude prices emerged as one of the main drivers of early market sentiment.

Concerns about the global demand outlook pushed U.S. crude futures down approximately 2.3%, with traders focusing more heavily on potential consumption weakness than supply threats arising from the continuing Middle East conflict.

Lower energy prices could provide some relief for investors after the recent surge in crude raised concerns that another inflationary shock could complicate the Federal Reserve’s policy outlook.

A sustained decline in oil would potentially reduce pressure on consumer and business costs, making developments in the energy market particularly important for expectations surrounding inflation and interest rates.

Cisco tumbles after quarterly update

The positive influence from falling oil prices was partly offset by weakness in Cisco Systems (NASDAQ:CSCO).

Shares of the networking company plunged more than 7% in premarket trading even though Cisco delivered better-than-expected quarterly results and issued an upbeat outlook.

The negative reaction suggested investors had set a high bar ahead of the announcement following the strong performance of technology and artificial intelligence-related stocks.

Cisco’s decline could limit the broader technology sector’s contribution to Thursday’s market gains despite continued optimism surrounding AI infrastructure spending.

Technology stocks lifted Wall Street on Wednesday

The Nasdaq and S&P 500 both finished higher during Wednesday’s session, although gains moderated after a stronger start.

The Nasdaq advanced 143.04 points, or 0.5%, to 26,588.49, supported by strength across several technology-related industries.

The S&P 500 gained 20.30 points, or 0.3%, to finish at 7,748.50.

The Dow Jones Industrial Average was comparatively subdued, spending much of the session close to unchanged before ending 21.58 points lower, or less than 0.1%, at 53,770.27.

The positive closes for the Nasdaq and S&P 500 helped offset some of the weakness recorded earlier in the week.

CPI report calms some inflation concerns

Wednesday’s initial advance followed the release of U.S. consumer inflation data that broadly matched economists’ expectations.

Consumer prices increased 0.1% in July following a 0.4% decline in June, according to the Labor Department.

Core prices, excluding food and energy, rose 0.2% after showing no change during the previous month.

Annual headline inflation eased to 3.4% from 3.5%, while the annual core rate declined to 2.5% from 2.6%.

The readings provided some reassurance that underlying inflation had not accelerated, helping reduce immediate concerns about the outlook for U.S. interest rates.

However, investors remain sensitive to the possibility that another sustained rise in energy costs could reverse some of that progress.

AI enthusiasm drives hardware stocks to new highs

Artificial intelligence-related stocks provided another important source of support for Wall Street during Wednesday’s session.

CoreWeave (NASDAQ:CRWV) and Super Micro Computer (NASDAQ:SMCI) attracted buying interest following positive reactions to their quarterly results and guidance.

Computer hardware stocks were particularly strong, with Super Micro helping extend the sector’s recent rally.

The NYSE Arca Computer Hardware Index surged 5.5% and closed at a record high.

Networking and semiconductor shares also advanced substantially, strengthening the technology-heavy Nasdaq.

Geopolitical risks continue to influence oil and inflation outlook

Despite the stronger performance of technology stocks and relatively encouraging inflation figures, geopolitical uncertainty remained an important restraint on market sentiment.

Recent tensions in the Middle East have contributed to significant volatility in crude prices and renewed concerns about potential disruptions to global energy supplies.

International mediators continue trying to restart negotiations between the U.S. and Iran, although public comments from both sides have suggested that a near-term resolution remains uncertain.

The sharp decline in crude prices on Thursday has temporarily shifted investor attention towards demand concerns, but any escalation in the conflict could quickly return supply risks to the forefront.

Investors weigh lower oil against corporate earnings

Transportation, gold and brokerage stocks were among the other areas recording gains on Wednesday, while housing and software shares moved notably lower.

Ahead of Thursday’s opening bell, investors are balancing the potential economic benefit of cheaper oil against mixed reactions to corporate earnings.

The 2.3% decline in U.S. crude futures could provide support if it helps ease inflation expectations, while Cisco’s sharp premarket drop highlights the risk posed by elevated expectations across the technology sector.

Oil prices, Middle East developments and incoming economic data are therefore likely to remain important drivers of Wall Street sentiment as investors reassess the outlook for inflation, growth and Federal Reserve policy.

European equities traded mostly higher on Thursday as falling oil prices and softer U.S. inflation data supported risk appetite. Expectations of weaker global energy demand pushed crude prices lower, while the latest U.S. inflation figures reduced concerns that the Federal Reserve could raise interest rates in the near term. The U.K. market underperformed its continental peers, however, as energy stocks declined and investors assessed slower British economic growth.

UK economy slows in the second quarter

Sterling came under pressure following official figures showing that economic growth in the U.K. moderated during the second quarter.

Real gross domestic product expanded 0.4% quarter on quarter, according to the Office for National Statistics, slowing from growth of 0.6% during the opening three months of the year. The quarterly figure was in line with economists’ expectations.

On an annual basis, the economy grew 1.2%, slightly stronger than the 1.1% expansion forecast by economists.

The slowdown nevertheless weighed on the pound as investors considered the implications for the outlook for the British economy.

STOXX 600 advances while FTSE 100 falls

The pan-European STOXX 600 Index gained around 0.2%, recovering after declining 0.2% on Wednesday.

Germany’s DAX advanced approximately 0.4%, while France’s CAC 40 added 0.1%.

The U.K.’s FTSE 100 moved in the opposite direction, falling around 0.3% as weakness among major energy companies weighed on the index.

Lower oil prices were a particular drag on London’s heavyweight energy sector, offsetting gains elsewhere in the market.

Costain and Rank Group rally after results

Costain Group (LSE:COST) shares moved sharply higher after the British infrastructure company delivered strong first-half results and reaffirmed its guidance for the full year.

Rank Group (LSE:RNK), which owns Grosvenor Casinos and Mecca Bingo, also recorded a substantial gain after reporting a 21% increase in underlying profit for the financial year ended June 30, 2026.

The results provided further company-specific support to parts of the U.K. market despite the broader decline in the FTSE 100.

Sixt, Thyssenkrupp and Maersk gain

In continental Europe, Sixt (TG:A46Z70) shares climbed after the German car rental company reported record revenue for the first half.

Thyssenkrupp (TG:TKA) also advanced after the steel and industrial technology group increased the lower end of its 2026 profit guidance.

Maersk (TG:DP4A) was another notable riser after the Danish shipping company raised its full-year outlook following a sharp increase in second-quarter profit.

Pandora (LSE:0FND) shares also strengthened after the jewellery group upgraded its 2026 expectations for organic growth and profit margin.

BP and Shell retreat as oil prices weaken

Energy stocks were among the main laggards as crude oil prices pulled back from their recent highs.

BP Plc (LSE:BP.) and Shell (LSE:SHEL) both declined as investors reacted to expectations of weaker global oil demand during the year.

The retreat in crude prices followed a recent rally and added pressure to the energy-heavy FTSE 100.

Antofagasta falls after mixed first-half update

Antofagasta (LSE:ANTO) shares also moved sharply lower following a mixed set of first-half results from the Chilean copper producer.

The company reported a substantial increase in first-half profit, benefiting from supportive commodity-market conditions.

However, Antofagasta reduced its copper production forecast for 2026, overshadowing the stronger earnings performance and weighing on the shares.

Overall, European markets remained supported by easing concerns over U.S. monetary tightening and lower energy prices, although weaker oil stocks and slower U.K. economic growth left London trailing the major continental indices.