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  • Wall Street holds steady as TSMC earnings strengthen AI outlook ahead of key US data: Dow Jones, S&P, Nasdaq, Wall Street

    Wall Street holds steady as TSMC earnings strengthen AI outlook ahead of key US data: Dow Jones, S&P, Nasdaq, Wall Street

    US equity futures were little changed on Thursday as investors weighed encouraging corporate earnings against geopolitical uncertainty and prepared for another busy day of economic releases. Record quarterly results from Taiwan Semiconductor Manufacturing Company also reinforced confidence that investment in artificial intelligence infrastructure remains strong.

    Inflation concerns ease as focus shifts to earnings

    Following Wednesday’s gains, Wall Street futures traded in a narrow range as investors turned their attention back to company results and macroeconomic indicators.

    At 04:00 ET, futures on the S&P 500 were down 0.2%, Nasdaq 100 futures declined 0.4%, while Dow Jones futures were broadly unchanged.

    Recent inflation data has strengthened expectations that the Federal Reserve can leave interest rates unchanged in the coming months, reducing one of the market’s biggest concerns. Investors are now looking to corporate earnings to determine whether current equity valuations remain justified.

    TSMC delivers another strong quarter

    Taiwan Semiconductor Manufacturing Company (NYSE:TSM) reported record second-quarter earnings after demand for advanced AI processors remained exceptionally strong.

    Net profit increased 77% year over year to T$706.6 billion (US$22 billion), comfortably surpassing analysts’ forecasts.

    As the primary chip manufacturer for companies including Nvidia and Apple, TSMC’s results are viewed as a key measure of global investment in artificial intelligence. The figures also followed positive guidance from ASML, adding further evidence that spending on AI infrastructure continues to accelerate.

    Apple approval lifts Chinese technology stocks

    Chinese technology shares advanced after Apple (NASDAQ:AAPL) received regulatory approval to launch Apple Intelligence features in China.

    Alibaba (NYSE:BABA) gained almost 5%, while Baidu (NASDAQ:BIDU) rose around 4% as investors welcomed the approval, which clears the way for Apple’s AI services in one of its largest markets.

    The development is expected to benefit both Apple and its domestic technology partners involved in supporting its artificial intelligence ecosystem.

    Markets monitor geopolitical developments

    Geopolitical risks remained firmly on investors’ radar following another round of US military action targeting Iran.

    Although markets have become more resilient to daily developments, concerns remain that any disruption to shipping through the Strait of Hormuz could push energy prices higher and complicate the inflation outlook.

    Investors await fresh market catalysts

    Attention now turns to quarterly results from Netflix (NASDAQ:NFLX), GE Aerospace (NYSE:GE), State Street (NYSE:STT) and U.S. Bancorp (NYSE:USB), alongside June retail sales and weekly jobless claims data.

    These releases are expected to provide a clearer picture of the strength of the US economy and help determine whether this year’s rally in equities can continue.

  • European stocks tread cautiously as geopolitical tensions offset softer US inflation: DAX, CAC, FTSE100

    European stocks tread cautiously as geopolitical tensions offset softer US inflation: DAX, CAC, FTSE100

    European equity markets traded little changed on Thursday as investors balanced easing inflationary pressures in the United States against rising geopolitical risks in the Middle East. While expectations of a patient Federal Reserve provided support, escalating tensions involving Washington and Tehran continued to keep energy prices elevated and limited risk appetite.

    Markets remain steady despite geopolitical uncertainty

    The pan-European STOXX 600 was broadly unchanged in early trading, outperforming weaker sentiment across Asian technology markets.

    Germany’s DAX, France’s CAC 40 and Italy’s FTSE MIB also traded close to flat, while London’s FTSE 100 slipped 0.4%.

    Investor sentiment remained heavily influenced by developments in the Middle East. Oil prices stayed near one-month highs after further US military strikes in Iran, while Tehran warned that the conflict could develop into what it described as an “existential war” with the United States.

    Softer US data supports rate expectations

    Providing some support to markets, the latest US inflation data reinforced expectations that the Federal Reserve is unlikely to tighten monetary policy in the near term.

    Producer Price Index (PPI) figures released overnight came in below expectations, adding to recent evidence of moderating consumer inflation and a cooling labour market.

    As a result, financial markets have reduced expectations of further policy tightening, with the implied probability of a Federal Reserve interest rate increase as early as July falling to around 10%.

    Earnings season and AI remain in focus

    Investors are also awaiting quarterly results from Taiwan Semiconductor Manufacturing Company (NYSE:TSM), widely viewed as a key indicator of demand across the semiconductor and artificial intelligence industries.

    The update is expected to provide further insight into the durability of global investment in AI infrastructure as the second-quarter earnings season gathers pace.

    Analysts currently expect companies within the STOXX 600 to deliver earnings growth of approximately 14.5% year over year, representing the strongest rate of profit growth in more than three years. However, much of that increase is being driven by a sharp rise in energy sector earnings following higher oil prices linked to geopolitical tensions.

    Excluding oil and gas companies, underlying earnings growth across European businesses is expected to be closer to 5.5%, with investors closely monitoring management commentary on profit margins and artificial intelligence-related investment.

    Movers

    Among individual stocks, Rotork (LSE:ROR) surged 65% after ABB agreed to acquire the engineering company in a US$5.5 billion deal.

    Partners Group (LSE:PEY) fell 7% following the release of its quarterly results.

    Frasers Group (LSE:FRAS) declined 5% after reporting annual results that fell short of profit expectations.

  • Airbus selects Scaleway to support AI and defence cloud strategy (AIR)

    Airbus selects Scaleway to support AI and defence cloud strategy (AIR)

    Airbus (EU:AIR) has signed a multi-year agreement with Scaleway, the cloud computing subsidiary of Iliad, to provide cloud infrastructure for sensitive industrial and defence applications as the aerospace group strengthens its European digital sovereignty strategy.

    The partnership will support the deployment of artificial intelligence solutions being developed alongside French AI company Mistral.

    European cloud partnership supports AI deployment

    Under the agreement, Scaleway will host a range of mission-critical applications covering aircraft design, engineering, manufacturing and corporate operations.

    The announcement follows Airbus’ partnership with Mistral, unveiled in May, to jointly develop tailored AI tools for the aerospace and defence industries.

    “The fact that the Mistral models are already deployed on Scaleway infrastructure will allow us to accelerate our AI approach,” Airbus Chief Digital Officer Catherine Jestin told reporters.

    Airbus intends to deploy Mistral’s AI technology across military programmes and certified aviation systems, areas where the company believes European partners should retain control over intellectual property, research, development and sensitive information.

    Digital sovereignty at the centre of the strategy

    According to Jestin, Airbus selected Scaleway after evaluating more than 150 technical and legal criteria.

    “The second set of criteria concerned legal requirements, in particular the much-discussed protection against the kill switch and against the application of extraterritorial laws,” she said.

    The agreement reflects growing efforts across Europe to strengthen digital sovereignty as artificial intelligence becomes increasingly important in critical infrastructure, industrial production and defence technologies.

    Last month, the European Commission proposed a Cloud and AI Development Act designed to expand Europe’s domestic cloud infrastructure and computing capabilities.

    Migration programme to continue through 2028

    Airbus expects to transfer around 70 critical applications to Scaleway’s cloud platform by the end of 2028.

    Over the longer term, the migration programme could eventually extend to as many as 900 applications during the next five to six years.

    The financial terms of the agreement were not disclosed.

  • TotalEnergies forecasts stronger second-quarter earnings but shares fall on softer LNG outlook (TTE)

    TotalEnergies forecasts stronger second-quarter earnings but shares fall on softer LNG outlook (TTE)

    TotalEnergies (LSE:TTE) said it expects improved second-quarter earnings as higher oil and gas prices, driven by the conflict involving Iran, supported its upstream business. Despite the stronger outlook, the company’s shares fell after investors focused on weaker expectations for its integrated LNG division.

    Higher energy prices boost earnings outlook

    The conflict in Iran and the resulting disruption to global energy markets lifted crude oil and natural gas prices during the second quarter, providing a significant tailwind for the French energy group.

    According to TotalEnergies, Brent crude averaged approximately US$103.80 per barrel during the quarter, up around 45% from roughly US$67 in the same period last year. The company also reported an average LNG price of US$10.20 per million British thermal units, while average gas prices reached US$5.55.

    TotalEnergies said cash flow from its exploration and production business should “reflect this level of production while capturing the increase of the average liquids prices,” adding around US$1 billion compared with the first quarter.

    LNG business disappoints investors

    Although the company expects stronger downstream and integrated power results, it warned that its integrated LNG division is likely to deliver weaker performance.

    Integrated LNG cash flow and earnings are expected to “decrease significantly,” reflecting weaker gas trading activity against a broadly flat to declining European market.

    JPMorgan described the trading update as “fundamentally solid,” but said it was unlikely to generate the same earnings upgrades recently seen at rivals Shell and BP. The bank highlighted softer-than-expected LNG performance compared with the British energy majors.

    Production and balance sheet remain on track

    Hydrocarbon production is expected to total almost 2.4 million barrels of oil equivalent per day during the quarter.

    The company estimated that the conflict in the Middle East reduced production by around 210,000 barrels of oil equivalent per day, less severe than the 360,000 barrels previously anticipated.

    Net investment remains on course to meet TotalEnergies’ annual guidance of US$15 billion. The group also expects its gearing ratio to improve by around two percentage points by the end of the second quarter, while working capital is forecast to decline by between US$1 billion and US$1.5 billion.

    TotalEnergies is scheduled to publish its full second-quarter results on 23 July.

  • FTSE 100 slips as Middle East tensions outweigh stronger UK economic growth

    FTSE 100 slips as Middle East tensions outweigh stronger UK economic growth

    The FTSE 100 traded lower on Thursday as escalating tensions between the United States and Iran overshadowed better-than-expected UK economic data, while investors continued to assess the potential impact of disruption to global energy markets.

    The FTSE 100 fell 0.37% by 07:25 GMT, extending the previous session’s losses. Elsewhere in Europe, Germany’s DAX declined 0.22% and France’s CAC 40 slipped 0.21%. Sterling was little changed against the US dollar at $1.3535.

    UK economy grows faster than expected

    Fresh figures from the Office for National Statistics showed the UK economy expanded more strongly than forecast.

    Gross domestic product increased 0.7% over the three months to May, comfortably ahead of economists’ expectations for 0.5% growth. Annual GDP growth accelerated to 1.3%, marking the fastest pace in 13 months.

    On a monthly basis, the economy grew 0.1% in May after contracting 0.1% in April, with the services sector providing the main support through a 0.3% increase in output.

    Iran tensions continue to dominate market sentiment

    Despite the encouraging economic data, geopolitical developments remained the primary focus for investors.

    A spokesman for Iran’s military headquarters warned that “all infrastructure in the region” would be “crushed under the steel blows” of Iran’s armed forces if the United States proceeded with threats to target Iranian infrastructure. The comments followed remarks by US President Donald Trump, who warned on Wednesday that Washington would “knock out all their power plants… all their bridges” unless Tehran returned to negotiations.

    Military activity intensified overnight as US forces reportedly carried out strikes around Tehran and in Semnan province, while Iran responded with missile and drone attacks targeting Bahrain, Jordan and Kuwait. Iran’s Revolutionary Guard said it had struck a US base in Jordan following what it described as an American attack near a children’s cancer hospital in Ahvaz.

    Strait of Hormuz concerns keep investors cautious

    Strategists continued to warn that tensions around the Strait of Hormuz could remain elevated for an extended period.

    Jefferies strategist Mohit Kumar said shipping through the vital energy corridor “has slowed down significantly,” adding that Iran currently appears unwilling to negotiate.

    Kumar said the latest escalation differs from previous confrontations, which had been “meant as an objective to gain an upper hand in negotiations and to eventually de-escalate the situation,” arguing Iran is unlikely to “give up its claim of sovereignty over the Strait that easily” and that he was “doubtful whether there is a unified leadership in Iran that can take that decision.”

    Jefferies said it was “keeping risk levels low” while continuing to expect “eventually we will get a deal even if it’s a fudge,” although the firm believes the current standoff could continue “for a few weeks,” leaving oil prices under continued upward pressure.

    Meanwhile, US Vice President JD Vance described the recent attacks as part of a “delicate diplomatic dance” during an interview with Joe Rogan, while President Trump said separately, “We’ll find out whether or not we settle with them or we just finish it off.”

    Commodities and corporate news

    Brent crude slipped 0.38% to US$84.63 per barrel, while West Texas Intermediate eased 0.08% to US$79.54. Gold futures fell 0.55% to US$4,029.27 an ounce, with spot gold down 0.88% at US$4,025.62.

    Among UK-listed companies, Crest Nicholson (LSE:CRST) warned operating profit is likely to come in at the lower end of its FY2026 guidance and confirmed an extension to a key banking covenant waiver.

    Ocado (LSE:OCDO) said it continues to pursue new retail partnerships in the United States while maintaining its target of becoming cash flow positive.

    TotalEnergies (LSE:TTE) said higher oil and gas prices linked to Middle East tensions are expected to support second-quarter earnings.

    Premier Foods (LSE:PFD) reported a 4% increase in first-quarter branded sales, helped by strong demand for its grocery and sweet treats portfolio.

    Frasers Group (LSE:FRAS) declined to provide guidance for FY2027, citing uncertainty surrounding ongoing takeover activity involving Hugo Boss and Accent Group.

    SSE (LSE:SSE) reaffirmed its earnings guidance after reporting higher investment across its electricity networks and stronger renewable generation, while also announcing the appointment of former National Grid chief executive John Pettigrew to its board.

  • SSE maintains full-year guidance as network investment jumps and renewable output increases (SSE)

    SSE maintains full-year guidance as network investment jumps and renewable output increases (SSE)

    SSE PLC (LSE:SSE) has reaffirmed its earnings guidance after reporting strong progress across its electricity networks and renewables businesses in its first-quarter trading update. The utility highlighted a significant increase in infrastructure investment alongside higher renewable generation, as it continues to execute its long-term growth strategy.

    Network investment accelerates

    SSE’s regulated networks division invested £0.9 billion during the first quarter, representing an 83% increase compared with the same period last year.

    The company said construction continues to advance on its major ASTI and LOTI electricity transmission projects, while investment in its distribution network also increased ahead of the planned submission of its ED3 business plan in December.

    The higher level of spending forms part of SSE’s wider £33 billion investment programme aimed at expanding and modernising the UK’s electricity infrastructure.

    “Since announcing our £33bn investment programme to unlock the enormous growth opportunity of U.K. electricity networks, we are continuing to see real progress as we work to deliver the plan, and in doing so we are underpinning compounding, long-term earnings growth and creating significant value for investors,” Barry O’Regan, CFO of SSE, said.

    Renewable generation strengthens

    SSE Renewables increased electricity generation by 31% year over year during the first quarter, benefiting from more favourable weather conditions and additional generating capacity coming online.

    The stronger operational performance supported the company’s confidence in its financial outlook, despite the seasonal importance of the winter months for energy production.

    Management maintained its adjusted earnings per share guidance of between 168p and 193p for the 2026/27 financial year, while leaving its longer-term target of 225p to 250p for 2029/30 unchanged.

    The company said the guidance issued in May remains valid, although performance will continue to depend on factors including weather conditions, energy markets and plant availability.

    Board strengthened with National Grid veteran

    SSE also announced the appointment of John Pettigrew as an independent non-executive director, effective from 1 December.

    Pettigrew joins the board after more than three decades at National Grid, where he held a range of senior strategic, operational and regulatory leadership positions.

    The appointment adds further industry experience to the board as SSE continues to expand its electricity infrastructure and renewable energy portfolio.

  • Trustpilot shares fall as unchanged full-year outlook overshadows strong first-half performance (TRST)

    Trustpilot shares fall as unchanged full-year outlook overshadows strong first-half performance (TRST)

    Trustpilot Group (LSE:TRST) shares fell around 10% after the online reviews platform reaffirmed its full-year guidance instead of raising expectations, despite reporting first-half results that exceeded market forecasts.

    Strong first-half results fail to lift guidance

    The company reiterated its expectation of delivering revenue growth in the high teens for the full year alongside an improvement of between two and three percentage points in its adjusted core profit margin.

    Although the outlook remained unchanged, investors appeared to have been anticipating an upgrade after Trustpilot reported stronger-than-expected bookings and revenue during the first six months of the year.

    First-half bookings reached US$171 million, around 5% ahead of company-compiled consensus estimates, representing constant currency growth of 18% compared with expectations of 16.5%. Revenue totalled US$151 million, approximately 2% above forecasts, with constant currency growth of 19%, ahead of the consensus estimate of 18.2%.

    North America and enterprise customers drive growth

    North America continued to be the company’s strongest-performing region, with bookings increasing 27% year over year.

    Trustpilot also recorded robust growth among larger customers, with annual recurring revenue from clients generating more than US$20,000 each rising 36% compared with the previous year. The performance highlights continued momentum in the company’s enterprise business.

    AI engagement continues to accelerate

    The company said it is seeing increasing engagement from artificial intelligence platforms.

    According to Trustpilot, requests from ChatGPT to its servers increased by more than 400% year over year during June. It also highlighted independent research from Seer Interactive, which ranked Trustpilot as the world’s most-cited review platform following a 1,490% increase in click-throughs generated by AI-powered search since fiscal 2025.

    Despite these encouraging operational trends and growing AI-related opportunities, investors focused on the absence of a higher full-year forecast, contributing to the sharp decline in the share price.

  • SIG shares slide after weaker sales prompt profit warning (SHI)

    SIG shares slide after weaker sales prompt profit warning (SHI)

    Shares in SIG (LSE:SHI) fell by as much as 22% on Thursday after the building materials distributor warned that challenging market conditions had weighed on first-half trading and lowered expectations for full-year profitability.

    Weak construction demand pressures sales

    SIG reported a 1.5% decline in like-for-like sales during the first half of the year, reflecting continued weakness across construction markets. The company said adverse weather conditions at the beginning of the year also disrupted trading and contributed to the softer performance.

    Management added that it does not expect a meaningful improvement in market conditions during the second half of the year.

    Profit outlook reduced

    As a result of the weaker trading environment, SIG now expects to deliver annual underlying operating profit of approximately £25 million (US$33.8 million).

    The revised guidance reflects ongoing pressure across the construction sector, with subdued demand continuing to affect activity in the company’s end markets.

    New improvement programme targets stronger cash generation

    Alongside the trading update, SIG unveiled a new improvement programme aimed at strengthening its financial performance over the medium term.

    The initiative is designed to generate £100 million in cash while increasing the group’s annual profit run rate by £50 million by the first half of 2028. Management expects the programme to improve operational efficiency and enhance profitability as market conditions recover.

  • Rotork agrees £5.5 billion takeover by ABB as shares soar on cash offer (ROR)

    Rotork agrees £5.5 billion takeover by ABB as shares soar on cash offer (ROR)

    Rotork (LSE:ROR) shares climbed almost 67% after Swiss engineering and technology group ABB (TG:ABB) reached agreement on a recommended all-cash acquisition of the UK-based flow-control specialist. The offer values Rotork at 503 pence per share, placing an enterprise value of approximately $5.5 billion on the business.

    Premium offer values Rotork at $5.5 billion

    The agreed offer represents a premium of roughly 60% to Rotork’s average share price over the previous three months. In addition to the cash consideration, shareholders will remain eligible to receive an interim dividend of up to 3 pence per share for the period ending 30 June, with the takeover price remaining unchanged.

    The acquisition will be funded using ABB’s existing cash reserves together with committed banking facilities. ABB added that proceeds from the planned sale of its robotics division to SoftBank are expected to further enhance its liquidity position.

    ABB targets expansion of its automation business

    ABB said the acquisition would strengthen its automation division by adding Rotork’s portfolio of flow-control and instrumentation products, which it believes complement its existing technologies.

    The company expects the acquisition to increase group revenue by around 3% while providing an immediate positive contribution to its Operational EBITA margin.

    “ABB has followed Rotork over many years, and we admire the execution excellence, engineering quality, and customer trust that Rotork’s teams deliver each day,” chief executive Morten Wierod said in a statement, adding that the company sees a “compelling strategic fit” and expects the deal to expand ABB’s automation offering while accelerating Rotork’s growth.

    Board unanimously backs the offer

    Rotork Chair Dorothy Thompson said the board believes the proposal reflects the progress achieved under the company’s Growth+ strategy while offering shareholders an attractive opportunity to realise value in cash.

    “The board believed the offer recognized the company’s progress under its Growth+ strategy while providing shareholders with an attractive cash opportunity.”

    The Rotork board has unanimously recommended that shareholders vote in favour of the transaction.

    The acquisition is expected to complete during the first half of 2027, subject to shareholder approval and the receipt of customary regulatory clearances.

  • Market Open: Frasers Group Growth, Foxtons Profit Warning

    Market Open: Frasers Group Growth, Foxtons Profit Warning

    FTSE 100 edges lower as Iran tensions offset UK GDP strength. Frasers posts stronger results, Foxtons cuts guidance and Brent crude rises.

    Market Overview

    The FTSE 100 opened marginally lower, while Germany’s DAX also slipped and the Euronext 100 was broadly unchanged. Overnight, US markets finished higher, with both the Nasdaq and S&P 500 extending gains. Investors balanced stronger-than-expected UK GDP data against continuing tensions surrounding Iran, while higher oil prices and geopolitical uncertainty kept risk appetite in check.

    Commodity markets reflected the cautious tone. Brent crude continued to strengthen as concerns over potential disruption to global oil supplies supported prices, while gold was unchanged and copper edged lower. Natural gas was little changed, Bitcoin was broadly flat against sterling, and major currency pairs versus the pound showed only modest moves.

    Market Numbers

    FTSE 100: Down (-0.01%), 10,514.96

    Euronext 100: Up (+0.00%), 1,915.62

    DAX: Down (-0.37%), 24,908.18

    NASDAQ: Up, 26,269.23

    S&P 500: Up, 7,572.40

    In the Headlines

    Strong results – Frasers Group (LSE:FRAS)

    Frasers Group reported higher revenue and improved retail profitability as international expansion continued to gather pace. The update highlights continued momentum in its Sports Direct-led growth strategy and reinforces management’s focus on expanding the business across overseas markets.

    Guidance cut – Foxtons (LSE:FOXT)

    Foxtons reduced its profit guidance after warning that lettings reforms and a weaker housing market are weighing on trading conditions. The update points to ongoing pressure on the UK property sector despite the group’s efforts to manage costs and maintain operational resilience.

    Currencies (vs GBP)

    USD: Down (-0.05%), $1.3539

    CHF: Down (-0.05%), Fr.1.0895

    EUR: Unchanged (0.00%), €1.1804

    JPY: Down (-0.01%), ¥219.431

    AUD: Unchanged (0.00%), $1.932

    Bitcoin (BTC/GBP): Down, £47,421.03

    Commodities

    Copper: Down

    Gold: Unchanged

    Brent Crude: Up

    Natural Gas: Unchanged