Market Report: Central banks in focus as FTSE 100 extends gains
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “UK markets seem well-rested after the long weekend and are back this morning with a spring in their step, with the FTSE 100 up in early trading. It’s been quite the ride as the UK’s blue-chip index pushes higher, keeping one eye on that all-time high from March. Investors look to have found their rhythm, having adjusted to life with tariff headlines around every corner. Now, the focus is shifting to what’s next – and with the Bank of England expected to cut rates this week, there’s growing hope that the UK economy might finally get the boost it’s been waiting for.
After a nine-day winning streak US equities finally fell under the pressure of fresh uncertainty. Safer assets were back on the menu, with gold prices climbing to a one-week high as investors rushed to safer ground after President Trump threatened fresh tariffs. His latest targets include foreign-made movies and pharmaceuticals, adding to the uncertainty around global trade. All eyes are now on the Fed, with markets watching closely to see if it holds firm on rates despite pressure from the White House.
Palantir delivered a knockout quarter by most standards, but shares are still down over 9% in after-hours trading – a clear example of the challenges that come with being priced for perfection. Two stories are playing out at once: one is a thriving business at the centre of the AI revolution; the other is a sky-high valuation that demands extraordinary earnings growth to make sense. The business is clearly booming, and continued momentum in the commercial space is crucial to proving it’s more than just a government defence contractor – at some point though, the valuation has to matter.
DoorDash just raised the stakes in the food delivery wars with £2.9bn bid for Deliveroo, aiming to squeeze out Just Eat and rattle Uber in the UK. The deal, expected to close later this year, could turn the UK market into a fierce two-horse race with DoorDash and Uber at the top, as Just Eat looks a likely target for both to grab share from – and give DoorDash a launchpad into the Middle East and beyond. With no competing bid in sight, this looks like a bold, calculated move to outpace global rivals and gain ground fast.
Oil prices bounced back a bit this morning, clawing back some of its recent losses. Some buyers saw the dip as a chance to get in, especially with fresh tensions in the Middle East pushing prices higher. Still, the market’s on edge, with more oil flooding in and worries that shaky global trade could drag down demand.”