Matt Britzman, senior equity analyst, Hargreaves Lansdown: “UK stocks are back on the front foot after a small stumble yesterday. The FTSE 100 has opened 0.4% higher this morning, tracking the positive sentiment felt across global markets after US producer prices rose at a slower pace than expected.
The S&P 500 notched yet another closing all-time high, buoyed by optimism after softer producer price data reinforced hopes that inflation is cooling - but the rally wasn’t at full steam. Stocks faded through the session on heavy volume as investors questioned whether valuations have run too far ahead of this afternoon’s CPI print, underscoring a market still balancing optimism with caution.
Headline US consumer inflation (CPI) is expected to tick up to 2.9%, the highest since January. A hotter-than-expected number could reignite rate fears and test the market’s lofty valuations, while an inline or softer print may reinforce the “Goldilocks” narrative that’s been powering equities to record highs. Core inflation holding steady at 3.1% will be key for gauging how sticky underlying pressures remain.
Last night belonged to big tech and the AI narrative, reminding investors that the trade still has legs. Oracle shares soared 36%, their biggest jump since 1992, after the company delivered a bullish outlook for its cloud business and a massive deal with OpenAI. The rally catapulted Oracle’s Larry Ellison to challenge Elon Musk as the world’s richest man, reigniting enthusiasm for AI-linked names and lifting the semiconductor space.
Oil prices slipped after a three-day rally, with Brent crude easing to around $67.40 a barrel as signs of softer US demand outweighed geopolitical jitters. A surprise build in US crude inventories, up 3.9 million barrels versus expectations for a draw, hinted at weaker consumption, tempering bullish momentum. Still, tensions from Moscow to the Middle East kept a risk premium in play, as markets await President Trump’s response to Russia’s airspace breach and fresh calls for EU tariffs on major Russian crude buyers.”
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