- FTSE 100 closes 8 points higher
- Wall Street heads lower
- US delivers thumping jobs beat
- Bodycote falls as bidder walks away
- William Hill owner to be taken out
4.55pm: A green finish
The FTSE 100 edged higher into the close on Friday, finishing up 8 points, or 0.1%, at 10,368.
It was a steady, slightly cautious session rather than a clear risk-on move. Early support came after a Bank of England business survey helped ease some worries that the recent Middle East energy shock could spiral into a broader inflation problem. That took a bit of pressure off sentiment and kept London markets in positive territory.
But gains were kept in check by a familiar mix of headwinds: Brent crude hovering near $99, stronger-than-expected U.S. payrolls pushing global yields higher, and lingering UK political uncertainty. In other words, not exactly the backdrop for an aggressive rally.
As Patrick Munnelly at Tickmill Group put it, London is currently benefiting from “inflation fears easing at the margin,” but the mood remains fragile. The next direction will likely hinge on whether oil prices, U.S. inflation data, and UK growth figures give the Bank of England enough room to stay on hold a little longer, or force a rethink.
4.06pm: Moribund
The FTSE 100 headed towards the close off its session high, but still in positive territory. Over the week, it has been moribund, losing around 16 points since Monday's open.
3.15pm: Jobs market paradox
Wall Street has turned lower after May's bumper jobs report, with the strong numbers paradoxically rattling markets by cementing expectations of a Federal Reserve rate hike before the year is out.
The S&P 500 is down 1% and the Nasdaq has shed 430 points, or 1.6%, with chipmakers nursing heavy losses after Broadcom's earnings shook confidence in the AI trade.
Traders are now fully pricing in a rate hike, even as President Trump continues to press his newly installed Fed chair Kevin Warsh for cuts.
The S&P 500's historic ten-week winning streak is also hanging by a thread. Iran ceasefire nerves are not helping.
2.18pm: NFP beat defies predictions
America's jobs market has delivered a thumping surprise, with May non-farm payrolls coming in at 172,000, nearly double the 85,000 economists had pencilled in.
April's figure was revised sharply higher too, from 115,000 to 179,000, suggesting the US labour market was considerably stronger heading into summer than anyone had realised.
The unemployment rate held steady at 4.3% and wage growth ticked up 0.3% on the month, though the annual rate eased slightly to 3.4%, taking some of the edge off inflation concerns.
The numbers are good news for workers and bad news for anyone hoping the Federal Reserve will cut interest rates anytime soon. Strong hiring and stable unemployment give the Fed every reason to sit on its hands, and markets are adjusting accordingly.
The dollar has strengthened on the data. For now, the world's biggest economy looks rather more robust than the doom-mongers had suggested.
12.36: London holds its nerve
The FTSE 100 is proving a rare oasis of calm this morning, up around 42 points, as markets elsewhere is a little more volatile. Asian indices, in particular Korea's Kospi, sold off sharply overnight, and Wall Street is braced for a negative open, with tech leading the way down ahead of the release of the all-important May jobs report.
Nasdaq 100 futures are down 1%, the S&P 500 has slipped 0.5%, while the Dow is clinging to marginal gains.
The jobs numbers land at 8:30 am Eastern and could move markets sharply either way. Economists expect a modest uptick in payrolls and a steady unemployment rate, but with inflation concerns creeping back in, there is little room for an unwelcome surprise.
Broadcom's earnings rattled the AI trade overnight and chipmakers are nursing sharp losses across the board. The Iran ceasefire remains fragile, and Trump's assurances that talks are in their "final stages" are being taken with the usual pinch of salt.
The S&P 500 is chasing a tenth consecutive weekly gain, which would be its longest winning run since 1985. A lot could change before the closing bell.
10.55am: Resilient performance
The UK blue-chip index was up 33 points in late morning trading on Friday, its relative lack of exposure to technology and artificial intelligence stocks proving an unlikely advantage as AI-related selling swept through Wall Street and Asian markets following Broadcom's disappointing earnings update.
AJ Bell investment director Russ Mould noted that Broadcom's failure to meet soaring AI-related expectations had prompted a wave of selling among related companies, compounded by a continuing lack of progress on a US-Iran peace deal, though oil prices held below $95 a barrel on hopes of an eventual breakthrough.
Attention turns later to the US jobs report, where analysts expect a headline figure of between 85,000 and 96,000 new positions, with unemployment steady at 4.3%.
A stronger-than-expected reading would reinforce the case for interest rates staying higher for longer, particularly if wage growth remains firm, while a weaker print could revive recession concerns.
Among individual movers, Raspberry Pi surged after a trading upgrade underlined its credentials as an AI beneficiary, while gambling group Evoke rose sharply after agreeing to a £243 million takeover by Bally's Intralot, bringing William Hill's 24-year run as a standalone listed business to an end.
9.45am: Why today's US jobs report matters more than usual
Non-farm payrolls land at a particularly delicate moment, arriving just two weeks before the Federal Reserve's first meeting under its new chairman, Kevin Warsh, and at a time when markets have dramatically shifted their bets from expecting rate cuts this year to pricing in an actual hike by December.
The headline number is expected to show around 85,000 new jobs created in May, down from 115,000 in April, which sounds weak but is actually fine given how dramatically the picture has changed.
Here's the key thing most people miss: the US economy doesn't need to create as many jobs as it used to.
The sharp slowdown in immigration has pushed down what economists call the breakeven rate, the minimum number of jobs needed each month just to keep unemployment stable, from around 150,000 to roughly 85,000 today, and the Fed has flagged it could fall close to zero by the end of 2026 as immigration slows further.
Meanwhile, the labour market is sending mixed signals: job openings are at a two-year high, but workers are staying put rather than quitting for better offers, a classic sign of a market that is resilient but cautious.
The real tension Warsh inherits is that inflation, stoked by the Iran war's effect on energy prices, is arguably a bigger threat than unemployment right now, making rate cuts politically popular but economically questionable.
His confirmation hearing suggested he believes AI-driven productivity gains will eventually allow rates to fall, which is probably right in the long run, but the inflationary pressures bearing down on the economy right now are stubbornly real-world rather than technological.
The upshot: a rate hike as early as July looks increasingly plausible, which would put Warsh on an immediate collision course with a president who has consistently pushed for cheaper borrowing.
Today's number probably won't settle that debate, but it will sharpen it considerably.
Here in the UK, the FTSE 100 is nibbling around the gain line. Briefly in the red, it is now up 28 points.
8.30: Quiet start
UK blue-chips made a quiet start to the final session of the trading week as they nudged into the red. Not quite the chaos seen in Asia's main markets overnight, but still reflective of the general nervousness around the AI sector and not helped by geopolitics, and specifically the Iran stalemate.
Here at home, we had one bid approach that failed (Apollo has walked away from metal basher Bodycote), and one that has succeeded: Greek outfit Bally's Introlot has finally put William Hill owner Evoke out of its misery.
Looking ahead, the big set-piece economic news out of the US later is the monthly jobless numbers in the form of non-farm payrolls.
Ahead of the open: Resilient start predicted
London is set to open 16 points higher on Friday, insulated from a wave of selling that has swept through Asian markets following sharp falls in artificial intelligence-related stocks on Wall Street.
South Korea's Kospi benchmark dropped 4.6%, with chipmaker SK Hynix and Samsung Electronics hit hard.
Japan's Nikkei 225 slipped 1.4%, with chip equipment maker Tokyo Electron down 7.2%.
The selling was triggered by disappointing results from US chipmaker Broadcom, whose shares sank 12.6% on Thursday after it issued a forecast that fell short of investor expectations.
US memory chip maker Micron Technology fell 7.7% and cybersecurity company CrowdStrike dropped 3.8%.
Wall Street futures also retreated on Friday morning.
The broader US market held up, with the S&P 500 gaining 0.4% and the Dow Jones Industrial Average rising 1.7% to a record high.
Oil prices stabilised after Thursday's declines, with Brent crude up 0.4% at $95.42 a barrel.
Uncertainty over US-Iran ceasefire talks continued to weigh on sentiment, with the Strait of Hormuz waterway, critical for global energy flows, remaining closed.
