- FTSE 100 flat 10 at 10,842
- Wall Street opens flat
- Tesco downgraded
- Fashion stocks marked down
3.12pm: Footsie nurdles below the gain line as US inflation cools
The FTSE 100 is nurdling below the gain line, but only just, with London unmoved by an American inflation reading that has lifted Wall Street.
US consumer prices rose 3.4% in the year to July, matching expectations and easing from June's 3.5%.
The monthly figure came in at 0.1%. That was enough to shift the betting on next month's Federal Reserve decision.
Traders now put the chance of rates staying on hold in September at roughly 55%, having been split down the middle a day earlier.
The Dow is flat, the S&P 500 up 0.3% and the Nasdaq Composite 0.7% higher.
Inflation remains well above the Fed's 2% target, which keeps the argument alive rather than settling it.
The Strait of Hormuz standoff continues to underpin both prices and Treasury yields, with Brent close to $90 a barrel and neither Washington nor Tehran shifting position.
1.38pm: Rangebound and why
Here's a little snippet we picked up from the IG market blog. Don't worry, we've paraphrased it so you don't have the machete through the dense undergrowth.
It notes that the FTSE 100 has now traded within a range of less than 0.5% for 10 consecutive sessions, an unusually long stretch of indecision.
At around 10,844 on Wednesday, the index sits at its lowest level in more than a week without ever having fallen far.
The paralysis has a single cause: Traders cannot price the Strait of Hormuz standoff, because nobody knows how long it lasts.
Washington and Tehran remain deadlocked over reopening the shipping route, with President Donald Trump reportedly seeking compensation from Iran.
Brent crude has settled at $89 to $90 a barrel, high enough to feed inflation expectations but stable enough to avoid forcing anyone to act.
That leaves the index caught between two forces pulling in opposite directions.
Defence names have benefited from the tension, with Spirax-Sarco, Rolls-Royce and BAE Systems leading Wednesday's risers..
That said, the stalemate may not survive the afternoon, with US inflation data due that could reset expectations for Federal Reserve policy.
12.55pm: Footsie flat as traders wait on US inflation print
The Footsie is flat at 10,843.84, having bobbled either side of the gain line for most of the day.
The drift reflects an absence of conviction ahead of July inflation data from the US, due this afternoon, which will shape the Federal Reserve's September decision.
Economists expect American consumer prices to have risen 3.4% year on year, down from 3.5% in June.
The stakes are unusually high because the market is genuinely split.
Traders are pricing roughly a 50-50 chance of a rate rise next month, an unusual position after a softer-than-expected US jobs report for July.
A hot print would tip the balance towards a hike.
The backdrop is the Strait of Hormuz, still closed as Washington and Tehran remain deadlocked.
American forces fired on a Panama-flagged vessel attempting to cross the Gulf of Oman on Tuesday, pushing Brent crude close to $90 a barrel.
Across the Atlantic, US futures are pointing to a mildly firmer open.
10.30am: Tesco slips as Shore Capital calls time on long-running buy
Tesco is among the FTSE 100 fallers, down 2.6% at 449.7p, after Shore Capital cut the supermarket to 'hold' from 'buy' for the first time since March 2023.
Clive Black and Darren Shirley trimmed their target price to 480p from 525p, though they have left forecasts untouched.
The call is less a criticism of Tesco than of the price.
Black reckons the shares are fairly valued on roughly 15 times forecast earnings, having enjoyed a rating expansion that now needs digesting.
His concern is the backdrop: shallow summer volumes, trickier cost recovery, slightly hotter competition, and the sheer weight of Tesco's own multi-year share gains as comparatives.
Market share data, he says, now shows Tesco in neutral rather than gaining.
The upshot is that an earnings upgrade at October's half-year results looks a stretch.
8.30am: Slow start
As expected, the FTSE 100 opened in the red, but only just, as the mid-summer lull continued in London with traded volume, a little like drought-stricken Britain's water supply, down to a trickle.
Leading the fallers were fashion stocks Burberry and JD Sports (more on these two later) and Tesco, which was subject to a downgrade by one of retail's more influential analysts (tune in for that too).
Over in the States later, all eyes will be on the latest inflation print, with some nerves after the below-par jobs reading last week.
Ahead of the open: Soft start predicted
Futures point to the FTSE 100 opening around 30 points lower, with nobody keen to take a big position before this afternoon's US inflation print.
The consumer price index (CPI) reading comes after the regular monthly report last week showed the world's largest economy shed more than 20,000 jobs in July.
Inflation has bubbled above the Federal Reserve's 2% target for more than five years, and the Iran war has done very little to help since February.
Three policymakers voted for a hike to borrowing costs in July, and markets now expect at least one before the year is out.
Oil is the complicating factor, with both main crude contracts up again on Wednesday and roughly 14% higher over the past week as the Strait of Hormuz stays shut.
Asia was a mixed bag, though Seoul stood out with a 4.2% jump as Samsung Electronics (KRX:005930, LSE:BC94) and SK Hynix did the heavy lifting.
In Silicon Valley, the mood was a little quieter, though the Anthropic watermarking update will undoubtedly cause some ripples.
