London stocks ended mixed on Wednesday, with the FTSE 100 falling 18.78 points, or 0.2%, to 10,478.34, dragged down by US rate hike concerns and a decline in Associated British Foods (AB Foods), owner of Primark. In contrast, the FTSE 250 rose 316.62 points, or 1.4%, to 23,330.07, and the AIM All-Share gained 3.88 points, or 0.5%, to 776.05.
European and US Markets Mixed
In Europe, the CAC 40 in Paris fell 0.8%, while the DAX 40 in Frankfurt edged up 0.2%. In New York, the Dow Jones Industrial Average rose 0.4%, the S&P 500 added 0.3%, and the Nasdaq Composite was slightly higher.
Dan Coatsworth, head of markets at AJ Bell, said: “Stocks across Europe…took a step back as investors continued to fret about the prospect of the Fed pushing up interest rates.” He noted that while expectations for a rate hike at the July Federal Reserve meeting have eased, “what’s troubling investors is the prospect of a rate hike at the end of the year.”
Fed Chair Comments and Bond Yields
New Fed chairman Kevin Warsh, speaking at a European Central Bank forum in Portugal, said the US central bank is committed to delivering price stability. “We’re going to deliver price stability in the US,” Warsh stated, sitting alongside the heads of the ECB, Bank of England, and Bank of Canada. He added that the Federal Open Market Committee (FOMC) is signed up to that objective.
US bond yields spiked, with the 10-year Treasury yield rising to 4.47% from 4.40% on Tuesday, and the 30-year Treasury yield stretching to 4.97% from 4.89%.
Meta Platforms Jumps on Cloud Plans
On Wall Street, shares of Meta Platforms jumped 10% after a Bloomberg report said the social media giant is preparing to launch a cloud computing business that would sell AI computing power to outside customers, competing directly with Amazon Web Services, Microsoft Azure, and Google Cloud.
Currency and Commodity Movements
The pound traded at $1.3273, up from $1.3263 on Tuesday, and firmed to €1.1657 from €1.1614. The euro weakened to $1.1383 from $1.1419, while the dollar fell to 162.43 yen from 162.60 yen.
Euro weakness followed data showing the eurozone’s annual CPI inflation slowed to 2.8% in June from 3.2% in May, below the consensus of 3.0%. Energy price rises slowed to 8.7% from 10.8%, and processed food price rises decelerated to 3.2% from 4%.
Jobs Data and Market Expectations
Thursday sees the US June jobs report, released a day early due to the Independence Day holiday. Kathleen Brooks, research director at XTB, said: “This week’s jobs data will be crucial information for traders. The NFP report is expected to show 113,000 non-farm payrolls were created last month.” She added that a strong report would remind markets that inflation is elevated due to a strong economy rather than energy prices.
Ahead of the report, ADP data showed June employment increased by 98,000 jobs, below the 122,000 in May and the consensus of 113,000.
Brent crude fell to $71.85 a barrel from $73.04, as Iran and the US prepared for indirect talks in Doha. Gold rose to $4,080.66 an ounce from $4,032.83.
FTSE 100 Movers
On the FTSE 100, Babcock International rose 5.2% on defence spending analysis, and J Sainsbury added 3.4% after a trading update. However, Associated British Foods fell 3.2% after reporting a 2.2% decline in Primark like-for-like sales in the third quarter, an improvement from the 2.7% drop in the first half. UK & Ireland LFL sales fell 0.2%, while Europe dropped 3.6%.
AB Foods also warned of a deteriorating outlook at its sugar business, expecting an adjusted operating loss of £25 million to £60 million in the 2026 financial year, worse than the £22 million loss consensus.
The biggest risers on the FTSE 100 were Babcock International, Coca-Cola Europacific Partners, Aberdeen, Endeavour Mining, and Sage Group. The biggest fallers were Associated British Foods, British American Tobacco, National Grid, GSK, and Diageo.
Outlook
Thursday’s global economic calendar features the US jobs report and eurozone unemployment figures. Local corporate calendar highlights include full-year results from Baltic Classifieds and Currys.
