Aarin Chiekrie, equity analyst, Hargreaves Lansdown: The FTSE 100 opened marginally down this morning, but there was little in the way of big UK stock news to nudge it in either direction. As expected, the Bank of England (BoE) held interest rates firm at 3.75% on Thursday. But the 5-4 vote split was much narrower than markets had expected, given forecasts the day prior to the announcement implied a 95% chance of rates staying flat. The BoE stated that inflation risks have diminished and that inflation is now expected to fall close to its 2% target by April and to remain around this level thereafter. There’s now a nearly 50% chance of rates being cut by 0.25 percentage points in March, if more evidence of a cooling labour market emerges. HL’s house view is for two cuts this year – though this is data dependent. The improved probability of further rate cuts, plus speculation around Kier Starmer's longevity at number 10, are putting pressure on Sterling this morning.
With earnings season in full swing, US stock futures slipped lower after poor market reactions to some of the big tech names’ results. A recurring theme is emerging: both Alphabet and Amazon delivered strong underlying business performance, driven by better-than-expected growth in cloud. But that hasn’t been enough to distract markets from their ballooning capital investment plans, which sit at mammoth levels of $175-185bn and $200bn respectively for 2026, as they fight to ramp up capacity and remain near the front of the AI race. As a result, Alphabet shares are down another 2.7% in pre-market trading today, while Amazon shares dropped 11.2% following its results last night. Software stocks continue to slide, with Bloomberg estimating the sector has lost 20% in the past week.
Gold prices have ticked higher this morning to around $4,870 per ounce. The wild price swings that began last week have continued as many look to take some profits, wiping out much of the yellow metal’s year-to-date gains.
Brent Crude prices edged slightly higher on Friday morning, up just over 1% to $68 per barrel. But the black stuff is still on track to record its first weekly decline in six weeks, as disagreements over the agenda between the US and Iran hinder progress. Iran wants to keep the talks focussed solely on nuclear issues and sanction relief, while the US is pushing for a broader remit that includes Iran’s ballistic missile program and regional activities. US citizens have also been urged to leave Iran immediately, adding fuel to the fire that possible military options in Iran are becoming more likely.
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