10:15am ET: Inflation complicates Fed outlook
US stocks opened lower on Wednesday, with the S&P 500 and Nasdaq under pressure after September inflation came in slightly hotter than expected, while investors also weighed the latest bank earnings.
The Dow Jones Industrial Average was little changed, up 13 points at 51,683, while the S&P 500 fell 0.7% to 7,755 and the Nasdaq dropped 0.9% to 26,958.
US consumer prices rose 3.7% year on year in September, above expectations for 3.6%, while core CPI, which excludes food and energy, increased 2.6%, compared with forecasts of 2.5%. Monthly headline inflation rose 0.6%, in line with expectations, but core prices increased 0.3%, ahead of the 0.2% forecast.
Oliver Rust, head of data at Truflation, said the latest figures did not necessarily justify another Federal Reserve rate hike, arguing that supply-side pressures were driving inflation.
“If you look purely from an inflationary standpoint, there’s no reason for the Fed to hike,” he said, pointing to energy costs as a key factor behind the acceleration in headline inflation.
Rust warned that sustained energy-driven inflation could eventually feed into core prices, but said higher interest rates would not directly resolve energy or import supply shocks. He added that he saw no reason for another hike for the rest of the year and expected further easing as the conflict subsides.
On the corporate front, Morgan Stanley (NYSE:MS) (Morgan Stanley (NYSE:MS)) reported a 12% increase in third-quarter revenue to $20.3 billion, as strong equity trading and record wealth management income offset weaker fixed-income markets.
Bank of America shares slipped before the opening bell after the lender reported lower quarterly profit, while BlackRock moved higher as increased fund-management fees supported earnings.
9.00 EDT: US futures fall as Nasdaq losses deepen
Dow Jones futures fell 248 points since last update, while S&P 500 futures dropped 36.50 points and Nasdaq 100 futures slid 140 points. All three were down for the day.
CDW led gains at $151.97, while Applied Materials led losses at $464.24.
Investors were weighing concerns about AI financing. Vital Knowledge questioned whether OpenAI and Anthropic could list within the timelines and at the valuations bullish investors expect.
Media reports said Anthropic planned to disclose its third-quarter financial results later today for the first time.
Analysts also flagged concerns that conditions for banks might be as favourable as they can get, despite earnings broadly meeting expectations outside fixed-income trading.
8.00 EDT: Wall Street preview
Dow Jones futures rose 144 points and S&P 500 futures added 11.25 points, while Nasdaq 100 futures fell 46.25 points as investors awaited US inflation data and assessed bank earnings.
Annual headline inflation is expected to accelerate to 3.6% in September from 3.4%, with core inflation rising to 2.5% from 2.4%.
Bank of America shares slipped before the opening bell after reporting lower quarterly profit, while BlackRock advanced as higher fund-management fees helped lift earnings.
JPMorgan Chase and Goldman Sachs fell in the previous session after disappointing fixed-income trading revenue.
ASML raised its annual outlook as demand for AI chipmaking equipment strengthened.
Brent crude traded at $106.25 a barrel amid renewed concerns about supply disruptions in the Middle East.
In London, the FTSE 100 stood at 10,680.67, up 30.34 points.
12.00 BST: FTSE 100 holds gains as Burberry leads risers
The FTSE 100 edged up 3.36 points, and the FTSE 250 added 18.70 points from their mid-morning readings, although both had eased from the levels in our last update.
Burberry led the risers, gaining 29.5p to 1,067p, while Airtel Africa was the biggest faller, shedding 6.36p to 280.84p.
Economists expect US headline inflation to rise to 3.6–3.7% in September from 3.4%, with core inflation edging up to 2.5% from 2.4%.
Iraq said crude exports reached about 2.7 million barrels a day despite disruption to the Strait of Hormuz.
11.00 BST: FTSE 100 extends gains ahead of US inflation data
The FTSE 100 added 20.15 points, and the FTSE 250 gained 34.95 points since the last update as investors awaited US inflation figures on Wednesday.
Bank of England chief economist Huw Pill was ‘sceptical’ that markets had priced in four quarter-point rate rises.
Governor Andrew Bailey said energy shock pass-through had been ‘more subdued’ in Britain so far.
10.00 am BST: Falling gilt yields lift property sector
British Land led the FTSE 100 higher as falling UK government bond yields strengthened demand for property shares.
The commercial landlord gained 2.7% to 409.8p, while Barratt Redrow rose 2.2%, Tritax Big Box REIT added 2.1%, Land Securities advanced 1.8% and LondonMetric Property climbed 1.7%.
The sector benefited after Bank of England chief economist Huw Pill questioned whether the four interest-rate increases priced by financial markets would be required to control inflation.
Lower bond yields can support property valuations by reducing expected financing costs and making real estate dividends more attractive relative to fixed-income investments.
The FTSE 100 gained 31 points, or 0.3%, to 10,682, extending its advance from earlier in the session.
Babcock International rose 2.5%, Burberry gained 2.4% and copper miner Antofagasta advanced 1.8%, while Standard Chartered fell 1.7%.
The domestically focused FTSE 250 continued to outperform, climbing 165 points, or 0.7%, to 24,504.
The FTSE 350 and All-Share indices both added 0.3%, while the AIM All-Share edged 0.1% higher to 771.8.
9.30 am BST: Falling gilt yields support property stocks
The FTSE 250 outperformed London’s blue-chip index, rising 131 points, or 0.5%, to 24,470 as property, defence and selected growth shares advanced.
Property stocks benefited as UK government bond yields declined after Bank of England chief economist Huw Pill questioned whether the four interest-rate increases priced by financial markets would be needed.
Self-storage group Big Yellow led the mid-cap risers with a 5.4% gain, while Great Portland Estates (LSE:GPOR) climbed 2.8%, Bellway rose 2.9% and Vistry Group added 2.8%.
The buying extended into the FTSE 100, where British Land advanced 2.4%, Barratt Redrow gained 2%, Tritax Big Box REIT rose 1.9% and Land Securities added 1.7%.
Chemring climbed 4.1% to 520.5p after its Roke subsidiary signed a five-year agreement worth at least US$170 million with a major US defence contractor for miniature radar altimeters.
Softcat moved in the opposite direction, falling 7.6% to 1,777p despite reporting a 19.4% increase in annual underlying operating profit to £215.1 million.
Investors focused on guidance for high single-digit profit growth in the current year, excluding its planned GDT acquisition, which represents a slowdown from the latest annual performance.
The FTSE 100 added 13 points, or 0.1%, to 10,663, while the AIM All-Share edged 0.1% higher to 771.6.
8.15 am BST: Mid-caps outperform at the open
The FTSE 100 opened broadly flat, adding 6 points, or 0.1%, to 10,657 as gains among property, retail and industrial shares offset weakness elsewhere.
Burberry led the blue-chip risers with a 2.3% gain, while JD Sports advanced 1.2% during a positive start for selected consumer stocks.
Property companies also moved higher, with British Land up 1.5%, Tritax Big Box REIT gaining 1.4% and housebuilder Barratt Redrow adding 1.2%.
Defence engineer Babcock International rose 1.6%, while Rolls-Royce gained 1.2% and Whitbread advanced 1.3%.
The domestically focused FTSE 250 outperformed with a 68-point, or 0.3%, rise to 24,408, while the AIM All-Share slipped 0.2% to 770.
Softcat was in focus after the information technology supplier reported a 24.7% increase in annual gross profit to £616.3 million and a 19.4% rise in underlying operating profit to £215.1 million.
The company expects high single-digit underlying operating profit growth in its 2027 financial year, excluding the contribution from its planned acquisition of US-based GDT.
7.00 am BST: London seen opening modestly higher
The FTSE 100 is expected to edge higher at Wednesday’s open as Asian technology shares stabilise following Tuesday’s sharp sell-off.
IG prices indicate the blue-chip index will open near 10,663, around 12 points above Tuesday’s close of 10,650.33.
Wall Street offered a subdued lead after strong bank earnings failed to sustain an early rally, with the Dow Jones dropping 180 points, or 0.35%, to 51,670.10, the S&P 500 slipping 0.02% to 7,805.45 and the Nasdaq losing 0.15% to 27,204.38.
Asian markets were mixed, with Japan’s Nikkei 225 rising 0.6% and South Korea’s Kospi rebounding 2.0%, while Australia’s ASX 200 fell 0.7%.
Hong Kong’s Hang Seng was 0.1% higher, and the Shanghai Composite was broadly unchanged during afternoon trading.
Brent crude was little changed at about $106.25 a barrel, while West Texas Intermediate held near $94.54.
Gold eased 0.2% to around $4,149 an ounce, sterling traded near $1.325, and Bitcoin was broadly flat at approximately $83,450.
In London, Softcat’s preliminary results will provide the main corporate focus, while Airtel Money begins unconditional trading following the largest London flotation in five years.
There are no major UK economic releases scheduled, although Bank of England speeches and a gilt auction will attract attention before US inflation figures at 1.30 pm BST.
