Category: Market Summary

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

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.

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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

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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.