Category: Market Summary

Wall Street looked set for a softer start on Thursday, with futures pointing lower as investors reacted to a sharp selloff in Broadcom and continued uncertainty surrounding geopolitical developments in the Middle East.

Technology shares were expected to bear the brunt of the pressure, with Nasdaq 100 futures down 1.2% ahead of the opening bell.

Broadcom (NASDAQ:AVGO) emerged as the key drag on sentiment, falling 14.6% in premarket trading despite delivering quarterly earnings that exceeded Wall Street forecasts.

AI Expectations Prove Difficult to Satisfy

While Broadcom’s second-quarter results came in ahead of analyst estimates, investors appeared underwhelmed by management’s decision to leave its long-term AI revenue outlook unchanged.

Chief Executive Hock Tan reaffirmed the company’s forecast of $100 billion in artificial intelligence chip sales, disappointing investors who had hoped for a higher target amid booming demand for AI infrastructure.

“Broadcom may have emerged as a key player in the booming AI infrastructure market, with a particular expertise in the custom chips increasingly being used by the likes of Alphabet and Meta,” said AJ Bell head of markets Dan Coatsworth.

He added, “However, just like its rival Nvidia, Broadcom is finding that meeting and even slightly beating forecasts is not enough when the market is holding it to such a high standard.”

The market reaction underscored how difficult it has become for leading AI-related companies to impress investors, even when delivering strong financial results.

Oil Retreat Offers Some Relief

The broader market mood was partially supported by falling energy prices following signs of diplomatic progress in the Middle East.

U.S. crude futures dropped more than 3% after Israel and Lebanon agreed to renew a ceasefire arrangement tied to the withdrawal of Hezbollah operatives from areas south of the Litani River and a halt to further attacks.

Lower oil prices helped ease concerns over inflation and reduced pressure on interest-rate expectations.

Focus Turns to U.S. Employment Data

Investors were also hesitant to make major bets ahead of Friday’s closely watched nonfarm payrolls report.

Ahead of that release, fresh Labor Department data showed an unexpected increase in first-time unemployment claims for the week ended May 30, hinting at a modest cooling in the labour market.

The employment figures are expected to play an important role in shaping expectations for Federal Reserve policy in the months ahead.

Previous Session Marked by Broad Market Weakness

Stocks finished lower on Wednesday as geopolitical concerns overshadowed recent optimism surrounding earnings and economic growth.

The Dow Jones Industrial Average fell 620.72 points, or 1.2%, to 50,687.07. The Nasdaq Composite lost 0.9%, while the S&P 500 declined 0.7%.

According to U.S. Central Command, American forces intercepted several Iranian drones and ballistic missiles before carrying out “self-defense” strikes on Qeshm Island following attempted attacks by Iran.

Despite the renewed military activity, investors have largely remained focused on the resilience of corporate earnings and economic indicators.

“For now, risk appetite remains supported, but with stretched valuations and shifting monetary policy expectations, markets appear increasingly sensitive to any signs that the earnings and growth story may begin to soften,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

Services Activity Remains Strong

Economic data released on Wednesday provided some encouragement.

The Institute for Supply Management reported that its services PMI rose to 54.5 in May from 53.6 in April, exceeding expectations and indicating continued expansion in the sector.

Nevertheless, software companies came under heavy selling pressure, pushing the Dow Jones U.S. Software Index down 4%.

Gold miners also weakened as bullion prices retreated, while gains among semiconductor, biotechnology and energy stocks helped cushion the broader market decline.

European stock markets traded higher on Thursday after Israel and Lebanon agreed to reinstate their fragile ceasefire, offering investors some relief following several days of military escalation that included drone attacks and cross-border strikes.

Despite the positive sentiment, gains remained measured as markets continued to grapple with concerns surrounding private credit markets, tariff uncertainty, inflationary pressures and the outlook for interest rates.

France’s CAC 40 led regional advances with a gain of 1.1%, while Germany’s DAX rose 0.6%. In contrast, the UK’s FTSE 100 underperformed its European peers, slipping 0.2%.

Corporate Movers

Among individual stocks, media group Vivendi (EU:VIV) declined 4.6% after suffering a setback in its challenge against European Union antitrust authorities, a decision that weighed on investor sentiment.

Shares in drinks producer Remy Cointreau (EU:RCO) surged 11% after Chief Executive Franck Marilly outlined a far-reaching three-year transformation strategy aimed at improving growth and profitability.

In Amsterdam, Universal Music Group (EU:UMG) fell 5.6% after Pershing Square, the investment vehicle led by Bill Ackman, sold its remaining holding in the world’s largest music company.

Biopharmaceutical company Pharming Group (EU:PHARM) gained approximately 2% after announcing that the U.S. Food and Drug Administration had accepted its resubmitted supplemental New Drug Application for Joenja, targeting the treatment of children aged four to eleven with APDS.

Meanwhile, online trading and investment platform CMC Markets (LSE:CMCX) jumped 13% in London after upgrading its outlook for net operating income in fiscal 2027.

Dutch healthcare technology company Royal Philips (EU:PHIA) added around 1% after revealing a new seven-year strategic partnership with WellSpan Health.

Investors Remain Cautious

While the ceasefire agreement provided a positive backdrop for European equities, broader market sentiment remained cautious.

Investors continue to monitor geopolitical developments, inflation trends and central bank policy expectations, alongside concerns surrounding global trade and conditions within credit markets.

As a result, risk appetite improved modestly but remained restrained despite the generally positive performance across most major European indices.

FTSE 100 gains as investors assess Middle East developments. S4 Capital cuts jobs, CMC Markets lifts outlook, while gold rises.

Market Overview

Markets were mixed overnight, with the FTSE 100 advancing 0.41 per cent to 10,347.37 and the CBOE UK 250 gaining 0.18 per cent. In Europe, the CAC 40 fell 0.71 per cent while the DAX declined 1.31 per cent. US markets remained positive, with the Nasdaq rising 0.22 per cent and the S&P 500 adding 0.12 per cent. Sentiment was supported by reports that hopes for a broader easing of Middle East tensions continue to offset concerns over recent regional strikes, while investors also assessed forecasts pointing to modest UK economic growth this year.

Commodity markets were mixed. Gold strengthened as investors maintained some defensive positioning, while copper and energy prices softened. Brent crude sentiment remained cautious amid developments in the Middle East, while natural gas edged lower. Sterling was broadly firmer against the US dollar and Australian dollar but weaker against the euro, Swiss franc and Japanese yen. Bitcoin slipped against sterling, reflecting a softer tone across digital assets.

Market Numbers

FTSE 100: Up (0.41%), 10,347.37

CAC40: Down (-0.71%), 8,150.420

DAX: Down (-1.31%), 24,795.94

NASDAQ: Up (0.22%), 30,466.4

S&P 500: Up (0.12%), 7,545.6

In the Headlines

Workforce Reduction – S4 Capital (LSE:SFOR)

S4 Capital announced further workforce reductions as challenging trading conditions continue to weigh on demand for advertising and marketing services. The move highlights ongoing pressure across the digital advertising sector as companies focus on cost control and efficiency.

Outlook Raised – CMC Markets (LSE:CMCX)

CMC Markets lifted its FY27 outlook after reporting a 20 per cent increase in annual profit for FY26. The upgraded guidance signals confidence in trading activity and market conditions, providing a positive read-through for the UK financial services sector.

Currencies (vs GBP)

USD: Up (0.04%), $1.3421

CHF: Down (-0.05%), Fr.1.06232

EUR: Down (-0.04%), €1.1559

JPY: Down (-0.10%), ¥214.582

AUD: Up (0.01%), $1.881370

Bitcoin (BTC/GBP): Down (-0.49%), £47,468.5

Commodities

Copper: Down (-0.31%), 6.49652

Gold: Up (0.73%), 4,466.93

Brent Crude: Down (-1.17%), 96.146

Natural Gas: Down (-0.56%), 3.214

European equities traded slightly higher on Thursday as investors evaluated the potential impact of a renewed ceasefire agreement between Israel and Lebanon on wider efforts to resolve the conflict involving Iran.

By 07:13 GMT, the pan-European Stoxx 600 index was up 0.1%. Germany’s DAX gained 0.2%, France’s CAC 40 advanced 0.3%, while London’s FTSE 100 was little changed.

Market sentiment received support after Israel and Lebanon agreed to reinstate a fragile ceasefire, raising hopes that diplomatic progress could eventually lead to a broader agreement between Washington and Tehran. Any potential U.S.-Iran deal has been closely linked to stability in Lebanon, where Israeli forces backed by the United States have been engaged in hostilities with Hezbollah, the Iran-supported militant group.

Following a fourth round of negotiations mediated by the United States, both Israel and Lebanon stated that the renewed truce would be “contingent on a complete cessation of Hezbollah fire and the evacuation of all Hezbollah operatives” from areas south of the Litani River.

“These steps will enable progress towards a comprehensive peace and security agreement,” a joint statement said.

Hezbollah was not directly involved in the latest round of talks.

Energy markets reacted positively to the developments. Brent crude, the international oil benchmark, fell 1.0% to $96.84 per barrel following the announcement. Government bond yields across the euro area also moved lower, reflecting expectations that a future agreement between the U.S. and Iran could lead to the reopening of the Strait of Hormuz, easing concerns over energy supplies and inflationary pressures.

Investors continue to monitor the implications for monetary policy, with markets still anticipating that the European Central Bank may need to raise interest rates later this year to contain inflation across the eurozone.

On Wednesday, U.S. President Donald Trump indicated that negotiations with Iran could deliver results as early as this weekend. Meanwhile, Iran’s foreign minister confirmed that communication channels with Washington remain open, despite earlier reports suggesting Tehran had suspended indirect contacts through intermediaries.

Political pressure is also building in the United States. The House of Representatives approved a resolution seeking to prevent Trump from continuing military operations without further authorisation. While the measure still faces significant hurdles, including Senate approval and the possibility of a presidential veto, it highlights growing domestic debate over the conflict.

AI Growth Story Remains in Focus

Outside geopolitics, artificial intelligence continued to dominate market discussions.

Taiwan Semiconductor Manufacturing Company’s (NYSE:TSM) chief executive said demand for advanced computing infrastructure and next-generation semiconductors is expected to remain exceptionally strong, providing a significant driver of growth over the coming years.

Despite those optimistic comments, European semiconductor stocks struggled in early trading. STMicroelectronics (BIT:STMMI) and ASML (EU:ASML) both edged lower after U.S. chipmaker Broadcom (NASDAQ:AVGO) released quarterly results.

Although Broadcom reported strong revenue growth supported by surging demand for AI-related chips, its shares fell in after-hours trading as some investors were disappointed by the company’s outlook.

Remy Cointreau Jumps on New Turnaround Strategy

Among individual movers, shares in Remy Cointreau (EU:RCO) rose sharply in Paris after management unveiled plans to increase operating profit by around €100 million by the 2028/29 financial year.

The spirits group is also targeting a doubling of sales generated through travel retail channels and emerging markets as part of a broad three-year transformation programme aimed at improving growth and profitability.

London equities moved higher on Thursday, recovering from the previous session’s decline as investors weighed signs of progress in U.S.-Iran negotiations against ongoing military tensions across the Gulf region.

In early trading, the FTSE 100 gained 0.18%, while sterling remained broadly unchanged at 1.3423 against the U.S. dollar. Across Europe, sentiment was similarly constructive, with Germany’s DAX rising 0.33% and France’s CAC 40 adding 0.51% by 07:24 GMT.

Market confidence was supported by comments from U.S. President Donald Trump, who expressed optimism over the prospects of a near-term agreement with Iran. Trump said the United States would recover Iran’s enriched uranium “in the not-too-distant future” and described negotiations as going “very well,” adding that a deal could potentially be reached “over the weekend.”

Further support came from U.S. House Speaker Mike Johnson, who said the administration was working on the “final piece” required to reopen the Strait of Hormuz. His remarks followed discussions at the White House involving Trump, Vice President Vance and Secretary of State Marco Rubio.

Despite the positive rhetoric, negotiations remain delicate. Iranian Foreign Minister Abbas Araghchi stated that “no tangible progress” had been achieved in talks with Washington, while Iran’s Tasnim News Agency reported that communications between the two sides had been suspended for several days.

Rubio also struck a cautious tone during testimony before Congress, saying Iran had yet to provide “final sign off” on several key issues, including the transfer of its highly enriched uranium stockpile and the reopening of the Strait of Hormuz. He emphasised that sanctions relief would not be considered without substantial concessions from Tehran.

Elsewhere in the region, Israel and Lebanon agreed to renew a ceasefire arrangement and establish pilot security zones excluding Hezbollah forces. However, reports from Lebanese state media indicated that Israeli drone strikes were carried out in southern Lebanon shortly after the agreement was announced, underscoring the fragile nature of the situation.

In Washington, the U.S. House of Representatives passed a war powers resolution by a vote of 215 to 208 that would require congressional approval for continued military action against Iran. The measure is largely symbolic, however, and is not expected to gain sufficient support in the Senate.

Away from geopolitics, investors received encouraging domestic economic news. The UK new car market recorded its strongest May performance since 2019, according to data from the Society of Motor Manufacturers and Traders (SMMT), with registrations increasing around 7% year-on-year.

Electric vehicle adoption also continued to strengthen. Battery electric vehicles accounted for 27% of all new registrations during May, lifting their share of the market to 24% so far this year. While still below the government’s mandated 33% target, the trend points to continued momentum in EV adoption.

UK Corporate Highlights

Mitie Delivers Strong Annual Growth

Mitie Group (LSE:MTO) reported another year of robust growth, with revenue rising 10.5% to £5.62 billion for the year ended March 2026. The facilities management specialist also recorded higher profits and cash generation, while its bidding pipeline reached a record £31.7 billion.

CMC Markets Upgrades Income Outlook

CMC Markets (LSE:CMCX) increased its net operating income guidance to between £460 million and £480 million after reporting record annual earnings. Chief Executive Lord Cruddas attributed the performance to heightened market activity driven by volatility across tariffs, geopolitical conflicts and commodity markets.

European stock markets traded lower on Wednesday as escalating tensions in the Middle East continued to lift oil prices, raising fresh questions about the outlook for inflation and monetary policy.

Brent crude futures surged close to 3%, approaching the $99-per-barrel mark, after the U.S. military reported intercepting Iranian missile attacks aimed at Bahrain, Kuwait and other regional targets.

Adding to investor caution, the OECD lowered its global economic growth forecasts and warned that a prolonged confrontation between the United States and Iran could push the world economy toward recessionary conditions.

Major European Indices Move Lower

Market sentiment remained subdued across the region, with Germany’s DAX Index declining 0.9%.

The U.K.’s FTSE 100 Index and France’s CAC 40 Index also moved into negative territory, each slipping around 0.3%.

Inditex Rallies on Strong First-Quarter Performance

Among the day’s standout performers, Spanish fashion retailer Inditex posted strong gains after reporting robust first-quarter trading.

The company’s shares climbed 6% after announcing an 8.8% increase in quarterly sales, supported by strong demand for Zara’s summer collections and ongoing efforts to optimize its store network.

DiscoverIE Slips Despite Record Annual Results

In London, customized electronics specialist DiscoverIE Group (LSE:DSCV) fell nearly 2%, even after reporting record earnings for the financial year ended March 2026.

The decline suggested investors may have been looking beyond the headline results amid broader market weakness.

B&M Surges as Profit Decline Proves Less Severe Than Feared

Discount retailer B&M European Value Retail (LSE:BME) emerged as one of the strongest performers of the session.

Its shares jumped 16% after annual earnings came in ahead of market expectations, with profits declining by less than analysts had anticipated.

Currys Advances Following CEO Appointment

Electricals retailer Currys (LSE:CURY) gained 1.4% after naming Fredrik Tønnesen as its new Group Chief Executive Officer.

Investors welcomed the leadership appointment as the company continues to pursue its operational and strategic priorities across key markets.

FTSE 100 slips as oil rises on Middle East tensions. Debenhams returns to growth while Ramsdens lifts profit guidance on gold strength.

Market Overview

European markets were firmer despite a cautious broader tone as investors weighed escalating Middle East tensions, tariff concerns and higher oil prices. The FTSE 100 fell 0.25 per cent to 10,356.35, while the CAC 40 gained 0.77 per cent and the DAX rose 0.48 per cent. In the US, the Nasdaq edged up 0.04 per cent, while the S&P 500 slipped 0.11 per cent. Market sentiment remained sensitive to geopolitical developments and the impact of rising energy costs on inflation expectations.

Commodity markets reflected the risk-off backdrop, with Brent crude strengthening as concerns over supply disruptions in the Gulf supported prices. Gold eased despite ongoing uncertainty, while copper weakened amid concerns over global growth and trade. Sterling was mixed against major currencies, losing ground against the US dollar and Japanese yen but strengthening against the euro, Swiss franc and Australian dollar. Bitcoin advanced as investor appetite for alternative assets improved.

Market Numbers

FTSE 100: Down (-0.25%), 10,356.35

CAC40: Up (0.77%), 8,209.090

DAX: Up (0.48%), 25,124.17

NASDAQ: Up (0.04%), 30,669.2

S&P 500: Down (-0.11%), 7,608.5

In the Headlines

GMV Growth Return – Debenhams Group (LSE:DEBS)

Debenhams Group reported a return to gross merchandise value growth, signalling continued progress in its turnaround strategy. The update suggests improving trading momentum across the retailer’s brands and provides support for confidence in its restructuring efforts.

Profit Outlook Raised – Ramsdens Holdings (LSE:RFX)

Ramsdens upgraded its full-year profit expectations, benefiting from sustained strength in gold prices. The higher outlook highlights the positive impact of precious metals demand on the group’s jewellery and pawnbroking operations.

Currencies (vs GBP)

USD: Down (-0.15%), $1.3445

CHF: Up (0.11%), Fr.1.06110

EUR: Up (0.01%), €1.1573

JPY: Down (-0.12%), ¥215.084

AUD: Up (0.16%), $1.877520

Bitcoin (BTC/GBP): Up (0.70%), £49,910.0

Commodities

Copper: Down (-1.55%), 6.60767

Gold: Down (-0.69%), 4,456.90

Brent Crude: Up (2.07%), 97.187

Natural Gas: Up (0.76%), 3.191

European equity markets opened lower on Wednesday as renewed tensions in the Middle East pushed oil prices higher and increased expectations that inflationary pressures could remain elevated for longer.

By 07:10 GMT, the pan-European Stoxx 600 was down 0.2%. Germany’s DAX declined 0.7%, France’s CAC 40 fell 0.4%, while the UK’s FTSE 100 traded little changed.

Geopolitical Developments Drive Investor Caution

Market sentiment was influenced by fresh military developments in the Gulf region, which dampened hopes for a near-term agreement between Iran and the United States.

According to Reuters, the U.S. military reported that Iranian air attacks targeting Kuwait, Bahrain and other locations were either intercepted or unsuccessful. At the same time, Iranian state media indicated that the Islamic Revolutionary Guard Corps had launched strikes against the headquarters of the U.S. Fifth Fleet in Bahrain, describing the action as retaliation for a U.S. attack on a communications facility south of Qeshm.

The renewed escalation has increased uncertainty surrounding diplomatic efforts aimed at ending the conflict and restoring stability in the region.

Oil Prices Climb as Hormuz Concerns Persist

Crude oil prices moved higher as investors assessed the risk that negotiations between Washington and Tehran could stall, potentially prolonging the conflict and delaying the reopening of the Strait of Hormuz.

Brent crude, the international benchmark, rose 1.7% to $97.67 per barrel, reflecting concerns about potential disruptions to global energy supplies.

The rise in oil prices has reinforced worries that energy-related inflation could remain a challenge for policymakers and central banks.

Bond Markets Price in Further ECB Tightening

Government bond yields across the eurozone also advanced as investors reassessed the outlook for monetary policy.

According to Reuters, financial markets now assign a greater than 50% probability that the European Central Bank will implement three additional interest-rate increases by the end of 2026 as it seeks to contain inflationary pressures linked to higher energy costs.

Germany’s two-year government bond yield, which is particularly sensitive to interest-rate expectations, rose three basis points to 2.654%. The benchmark ten-year Bund yield gained 2.5 basis points to 3.0%.

Bond yields also moved higher in France, Italy and Spain. Since bond prices and yields move in opposite directions, the rise in yields contributed to pressure on equity markets.

Airlines Weaken While Inditex Gains

Among individual stocks, airline shares came under pressure as higher fuel prices weighed on sentiment.

Air France (EU:AF) and Lufthansa (TG:LHA) both traded lower, reflecting concerns over the impact of rising energy costs on operating expenses.

In contrast, Spanish fashion retailer Inditex performed strongly after the Zara owner delivered a positive assessment of trading conditions at the start of the summer season, helping to lift investor confidence in the stock.

UK equities edged lower on Wednesday as investors reacted to escalating geopolitical tensions in the Middle East, rising oil prices and renewed concerns over international trade policy.

The FTSE 100 fell 0.13% in early trading, while sterling weakened 0.15% against the US dollar to 1.3449. European markets also traded lower, with Germany’s DAX declining 0.72% and France’s CAC 40 down 0.34%, reflecting broader risk aversion across the region.

Proposed US Tariffs Add to Market Uncertainty

Investor sentiment was further dampened by fresh trade proposals from the United States. The Office of the US Trade Representative proposed additional tariffs of 12.5% on imports from 54 economies, including the UK, China, Japan and India, after determining that these countries had not adequately prohibited or enforced restrictions on goods produced using forced labour.

A lower tariff rate of 10% was proposed for six economies, including the European Union and Canada, where existing bans were judged to be insufficiently enforced.

US Trade Representative Ambassador Jamieson Greer described the situation as “unacceptable,” stating that the United States would “no longer tolerate this disparity.” Public hearings on the proposals are scheduled for 7 July, while written submissions will be accepted until 6 July.

Middle East Conflict Drives Risk-Off Sentiment

The primary source of market concern remained the escalating conflict in the Gulf region. Iran launched missile and drone attacks targeting Kuwait International Airport, causing significant damage to Terminal 1, injuring several people and prompting the suspension of Kuwait Airways operations, according to local authorities.

Elsewhere, Bahrain reported that its air defence systems intercepted multiple Iranian missiles and drones aimed at civilian targets, leading the kingdom to place its military forces on heightened alert.

The US military stated that attacks directed at American forces in the region were unsuccessful, contradicting claims made by Iran’s Islamic Revolutionary Guard Corps.

Diplomatic efforts also appeared stalled. US President Donald Trump said discussions between Washington and Tehran were continuing, dismissing reports of a breakdown in communication. However, Iranian media reported that exchanges between the two countries had ceased several days earlier.

At the same time, the United States intensified economic pressure on Iran by imposing sanctions on four Iranian digital asset exchanges, including Nobitex. Separately, US forces reportedly disabled another vessel attempting to reach Iran, increasing the number of ships affected by the maritime blockade.

Corporate Updates: DiscoverIE, B&M, Debenhams and Currys in Focus

Among UK-listed companies reporting developments, DiscoverIE (LSE:DSCV) announced record adjusted pre-tax profit of £51.9 million for the year ended March 2026, supported by a return to organic growth following a prolonged period of inventory destocking across industrial markets.

B&M European Value Retail (LSE:BME) reported a 37.5% decline in adjusted pre-tax profit to £284 million, despite achieving a 3.6% increase in annual revenue to £5.78 billion. Margin pressure and rising costs contributed to a significant reduction in earnings.

Debenhams Group (LSE:DEBS) reported its first return to sales growth following a multi-year restructuring programme, with first-quarter gross merchandise value rising 0.5% and May trading accelerating to approximately 8%.

Meanwhile, Currys (LSE:CURY) appointed Fredrik Tønnesen as its next Group Chief Executive Officer. Tønnesen, who previously led the company’s Nordic operations, will assume the role on 3 August after overseeing a significant improvement in profitability within that division.

Market Focus Remains on Geopolitics and Economic Policy

With geopolitical tensions escalating and trade policy uncertainty increasing, investors remain focused on developments that could affect global growth, inflation and energy markets. Rising oil prices and concerns over supply disruptions continue to influence market sentiment, while upcoming decisions on US tariffs may add further volatility in the weeks ahead.