- FTSE 100 opens on the front foot, extending its recent rally
- US markets rise for the second session in a row
- Gold continues to push higher
- Oil extends rally into a third day
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“UK markets have continued on the front foot, with yesterday’s close marking four consecutive days of gains for the FTSE 100, with another jump higher this morning. Positive earnings reports and growing optimism about China’s economic recovery helped lead insurers and miners to the forefront in yesterday’s session. This week, all eyes are on the Bank of England’s upcoming interest rate decision on Thursday, with markets pricing in a 90% chance of no change as policymakers navigate the challenging task of balancing slowing growth with sticky inflation.
US markets carried their mini recovery into a second day, with economic data suggesting a slowdown rather than a looming recession. The S&P 500 gained 0.64% in a session that seemed to lift nearly everything – except for the megacaps. The big question now is whether this momentum can extend into a more sustainable rally. Futures markets point to a weaker opening today, and with President Trump likely to keep throwing curveballs, investors shouldn’t get too comfortable in the short term. Barring any major surprises, the next key moment comes tomorrow with the Fed deciding on the next step for interest rates. A ‘wait and see’ approach is expected as the Fed grapples with the tough task of evaluating the impact of Trump’s tariff chaos.
Gold prices continue to march higher, despite investors dipping their toes back into riskier assets. The so-called fear index has cooled, and stocks have seen some love. But gold’s safe-haven appeal, amidst inflationary pressures and global tensions, is still managing to attract enough demand to send it to fresh all-time highs.
Brent crude oil rose to around $71.5 in early trading, marking a third consecutive day of gains, driven by concerns over supply disruptions due to ongoing conflicts in the Middle East. Israel’s large-scale attack on Gaza and President Trump’s threats against Iran have added to the uncertainty, while expectations of increased demand from China, fuelled by stimulus plans and strong economic data, are acting as another tailwind.
