Matt Britzman, senior equity analyst, Hargreaves Lansdown: “The FTSE 100 is expected to open a touch higher this morning as sentiment steadies following last week’s sharp AI-driven swings. European markets are also set for modest gains, but with the US, China and parts of Asia shut for holidays, trading is likely to be quieter than usual.
It’s another big week for UK investors, led by miners, with Rio Tinto expected to report a strong finish to the year after record production across iron ore, copper and lithium. Cash flow may look lighter thanks to heavy investment, but firmer commodity prices and a clearer path into 2026 should keep the focus on what comes next rather than what’s gone. Anglo American’s results should look more mixed, with better iron ore offset by weaker copper and a sharply reduced dividend putting the outlook under the microscope. Shifting to the defence space, BAE Systems reports with strong momentum, a bulging order book and high hopes that rising global defence spending can keep growth ticking over into 2026.
US markets are closed today, and that may be a welcome relief to many, after last week was once again dominated by violent swings linked to AI. Some stocks are flying, and others are getting crushed in moves that often feel disconnected from fundamentals. Power and utility names were the clear winners as investors bet they’ll be essential to the AI build-out, while anything tied to data or software found itself in the firing line. Away from the AI noise, falling bond yields and softer inflation offered some relief, but a few worrying signals around growing loan defaults were one reminder that not everything under the hood is improving.
Oil prices were steady this morning, with Brent hovering around $67.70 a barrel, as investors juggle rising geopolitical tension against a market that still looks well supplied. Talks between the US and Iran resume tomorrow, keeping traders on edge given the risk of escalation, while fresh Russia-Ukraine discussions are unlikely to unlock much extra oil anytime soon. Even so, prices are struggling to lift as OPEC+ debates adding more supply and the IEA flags a growing surplus and softer demand growth ahead.”
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