- FTSE 100 ends 47 points higher
- Wall Street noses lower
- Interest rates set to fall?
- Pearson down 8%
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That's a wrap. The FTSE 100 closed 47 points to the good at 10,184.35.
3.15pm: Tech index leads Wall Street decline
US stocks continued to move lower on Wednesday as investors eyed bank earnings, a potential ruling from the Supreme Court on US tariffs, and geopolitical developments, including possible US military action in Iran.
The Nasdaq was down 0.8% at 23,522 points, the S&P 500 was down 0.5% at 6,930 points, and the Dow Jones fell 0.2% at 49,118 points.
Meanwhile, retail sales for November were better than expected at 0.6%, following a revised 0.1% decline in October, according to the Commerce Department. The report was delayed by the 43-day US government shutdown.
Following the report, Wells Fargo analysts wrote that, despite some downward revisions to prior data, they see consumer spending carrying into the fourth quarter. “That said, watch out for a comparatively soft December as previewed in both our Holiday Sales outlook and in high-frequency data,” they wrote.
1.44pm: Rates set to fall further?
UK interest rates look set to fall further this year, as inflation pressures ease faster than the Bank of England once expected.
Alan Taylor, a rate-setter at the Bank of England, says cheaper imported goods, lower energy prices and domestic policy changes are all pushing inflation down. Trade diversion is doing some of the work.
Goods shut out of the US by tariffs are increasingly flowing into the UK and Europe, adding to disinflation.
Taylor argues the effect may be bigger than the Bank’s forecasts suggest, with inflation potentially undershooting expectations. At home, food inflation has cooled, energy prices have stabilised and budget measures due in April are set to lower prices further.
Headline inflation is 3.2% but could be close to the 2% target by mid-2026, possibly sooner. With wage growth cooling, Taylor sees scope for rates to keep moving lower from 3.75% as policy heads back towards neutral.
12.13am: Wall Street headed for a softer start
The FTSE 100 rose 32 points to 10,170 on Wednesday as investors digested global market signals, with attention still fixed on banks, inflation data and political risk.
The UK index advanced even as US stock futures edged lower ahead of another round of big bank earnings and fresh inflation figures. In the US, futures on the Nasdaq 100 fell about 0.6%, while the S&P 500 was down 0.4% and Dow futures slipped 0.3%, reflecting a pullback in financial stocks after recent record highs.
Investor focus remains on bank results, following a muted market response to JPMorgan Chase’s earnings despite profit growth across the sector. Caution persists around elevated asset prices, sticky inflation and geopolitical risks, which continue to cap enthusiasm.
Macro data is also in focus. US producer price inflation for November is due later, after a benign consumer inflation reading reinforced expectations that the Federal Reserve will keep interest rates unchanged in January. Retail sales figures will provide another gauge of consumer strength.
Elsewhere, gold and silver pushed to fresh record highs, supported by expectations of future rate cuts, geopolitical tensions and renewed pressure on the Federal Reserve.
Markets are also watching the US Supreme Court, which may rule on a challenge to presidential tariff powers, adding another layer of near-term uncertainty.
10.32am: Pearson poser
The day's big faller was Pearson, down 8% to 992.4p. At first blush, the update provided a reasonably glowing account of progress. For investors, however, it was more notable for what it omitted - a clear assessment of the year ahead.
Add to the recurrent worries about the impact of AI on the education sector, and Pearson specifically, and anxiety mounts.
Also in the mix was the confirmed loss of a US student assessment contract in New Jersey, which will weigh on performance in the first half of the year.
Pearson said it ended 2025 with momentum. Underlying sales growth accelerated to 8% in the fourth quarter and reached 4% for the full year. Adjusted operating profit is expected to be £610 million to £615 million, up about 6%, while cash generation remained strong, with more than 95% of profits converted into cash.
9.30am: Precious metals stocks in demand (again)
Precious metal stocks led the Footsie, with Endeavour Mining topping the index, closely followed by Fresnillo, as bullion surged to fresh records.
Gold bugs had plenty to feed on. Spot gold pushed to a new all-time high just shy of $4,640, while silver powered through $90.
Geopolitical tension was the spark. President Trump warned Iran it would face “very strong action”, reviving fears around the Strait of Hormuz.
Oil jumped before easing. The bigger story, though, remains supportive for precious metals even as crude faces a potential glut later in the year.
Concerns about the US Federal Reserve's independence added fuel. Political pressure tends to lift inflation expectations, weaken the dollar and raise long-dated yields, all positive for gold. The metal is no longer just a hedge. It is increasingly treated as a strategic asset.
8.30am: Bright start
The blue-chip index was 29 points higher at 10,166.06 in the first half hour of trading, with the mining sector providing the main support.
BP was a little softer after the revelation of a potential write-down of up to $5 billion related to its renewables assets. Pearson and Vistry fell after updating on trading.
Footsie called higher
The FTSE 100 was called 16 points higher on Wednesday after a flat, uninspiring session the day before.
Asian markets were mixed. Tokyo stood out, hitting a new record as election speculation gathered pace. Investors are betting Japan’s prime minister may call a snap vote, lifting hopes of policy momentum.
The yen weakened sharply, adding support for exporters. Elsewhere in the region, moves were modest. China edged higher after reporting record trade figures, while several markets across Asia slipped.
Overnight, Wall Street pulled back from record highs. Investors digested subdued US inflation data, mixed bank earnings and a sharp jump in oil prices.
US consumer inflation held steady, keeping the door open to interest rate cuts later next year, but not enough to drive equities higher.
Oil prices steadied after an earlier surge. Markets are watching Iran closely after fresh tariff threats from Washington raised concerns about supply risks. Gold ticked higher as geopolitical tensions added to demand for defensive assets.
Here in the UK, we have updates from BP, Vistry and Pearson.