Matt Britzman, senior equity analyst, Hargreaves Lansdown: “The FTSE 100 powered to yet another record high yesterday, surging over 1% after UK inflation dropped to 3.0% in January, its lowest level since March last year. Markets now see an 80% chance of a move in March, and with weak jobs data earlier in the week painting a similar picture, the interest rate path looks increasingly supportive for UK equities. The index couldn’t quite hold onto its new title for long, with the FTSE 100 down a touch at the open as investors get stuck into another busy day for corporate results.
Nestlé's full-year results this morning offered shareholders some welcome relief after weeks of hand-wringing over the infant formula recall saga. Fourth-quarter organic growth of 4.0% comfortably beat expectations, driven by volume gains the company called its best in over a decade, with PetCare a particular bright spot. The formula crisis looks set to impact growth far less than many had feared, and guidance of 3-4% organic growth for 2026 should help settle some nerves. New leadership is also wasting no time putting its stamp on the business, announcing a sharper focus on Coffee, Pet and Nutrition while signalling the exit of non-core assets, including ice cream - a clear statement of intent that should be well received.
Rio Tinto echoed a familiar theme for this mining earnings season - copper stealing the spotlight. The copper division delivered a 114% jump in cash profit (EBITDA), powered by the ramp-up at Oyu Tolgoi, and the numbers only reinforce why the market is increasingly valuing these diversified miners on their copper credentials. At the group level, cash profits rose 9%, as strong volumes and tight cost discipline offset softer iron ore prices, while a $6.5 billion dividend, maintaining a 60% payout for a tenth straight year, gives income investors something to work with. With copper a clear focus for 2026, albeit with slightly higher costs than expected, new CEO Simon Trott is clearly betting that the red metal will define Rio's next chapter.
US markets closed in the green last night, with the S&P 500 up 0.5% and the Nasdaq leading the way with a 0.8% gain. Tech felt some love as Nvidia climbed 2.2% on news that Meta will deploy millions of its processors in the coming years, a small step forward for a sector still trying to shake off jitters around AI spending. It looked set to be an even stronger session, with the S&P 500 up as much as 1% at one point, but the mood cooled after the release of the Fed's latest meeting minutes. US futures are pointing higher this morning, suggesting investors may be ready to look past the Fed noise and push on.
The January Fed meeting minutes made for uncomfortable reading, revealing a central bank struggling to find consensus on where rates go from here. In a notable hawkish twist, some officials floated the idea of raising rates if inflation proves stubborn - a far cry from the rate-cutting narrative markets had been banking on. Others maintained that further cuts would be warranted if price pressures continue to ease, leaving the outlook as clear as mud. Bond yields drifted higher following the release, a reminder that the path forward for monetary policy is anything but straightforward.
Oil is extending its gains, with Brent crude back above $70 a barrel this morning, building on its strongest daily gain since late October as fears of a military confrontation between the US and Iran rattled energy markets. Nuclear talks between the two sides appear to be going nowhere fast, and the geopolitical premium is clearly back in play. That’s overshadowing a modest draw in US crude inventories that did little to shift the supply picture.”
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