MARKETS LIVE: US futures edge higher as AI safety concerns grow and oil prices remain elevated

 

US stock futures edge higher
Bitcoin up 1.4% to US$84,173
FTSE 100 gains 38 points
FTSE 250 up 123 points

 

8:00 am ET: US futures recover

US stock futures were slightly higher, with Nasdaq-100 futures up 0.3% at 30,664, S&P 500 futures up 0.2% at 7,758 and Dow Jones futures 76p higher at 51,913, as investors weighed renewed AI safety concerns and elevated oil and bond prices.

The moves came after a leaked Anthropic IPO prospectus and OpenAI‘s decision to scrap a next-generation model raised fresh questions about the risks surrounding artificial intelligence.

AMD shares were little changed after the Lisa Su-led chipmaker acquired AI startup World Labs, founded by AI researcher Fei-Fei Li, for $8.2 billion in a deal focused on talent and AI expertise.

The acquisition was soon overshadowed by a Reuters report on the leaked Anthropic prospectus, which showed the AI company targeting a $2 trillion valuation, more than double its estimated $965 billion valuation.

Investors are also focused on a busy US economic calendar, with the Job Openings and Labor Turnover Survey and the Conference Board’s consumer confidence index due on Tuesday, followed by PCE inflation, GDP, manufacturing data and Friday’s jobs report.

The data could influence expectations for Federal Reserve interest rates and add to volatility across risk assets, including cryptocurrencies.

Bitcoin was up 1.4% at US$84,173, recovering after retreating roughly 4% from a more than seven-month high earlier this month.

Brent crude futures for December delivery fell 1.1% to US$96.79 a barrel, down from a previous close of US$97.83, after opening at US$98.55.

The December contract traded between US$96.64 and US$100.28, while remaining 42% higher than a year ago and well below its 52-week high of US$126.41.

November Brent futures were at US$104.04 a barrel, down 0.88%, while Brent crude spot prices rose 0.6% to US$99.06 a barrel.

Gold prices struggled to recover from a more than seven-week low as higher yields capped gains in the non-yielding asset.

UK shares held on to earlier gains, with the FTSE 100 up 38 points, or 0.4%, at 10,722, while the FTSE 250 rose 123 points, or 0.5%, to 24,459, although the advance had lost momentum.

12 noon BST: FTSE 100 and FTSE 250 not giving up early gains

The FTSE 100 extended its gains to 10,723, up by over 9p or 0.4%, while the FTSE 250 climbed by 33p or 0.4% to 24,441, with mid-cap shares continuing to outperform.

Oil prices and elevated bond yields set a cautious tone for global markets on Tuesday, as investors weighed the prospect of borrowing costs remaining high while continuing to monitor disruptions to energy supplies from the Middle East.

Brent November futures rose about 1.5% to US$106.90 a barrel, while the December contract traded around US$98, with concerns over Middle East supply disruptions supporting prices despite signs that Gulf crude exports are recovering.

The rise in oil prices has added to inflation concerns and helped keep government bond yields near multi-year highs, putting pressure on equities by raising the prospect that interest rates will remain elevated for longer.

European shares nevertheless moved higher, with the FTSE 100 up, the DAX gaining 0.18% to 8,093.11 and the CAC 40 rising 0.55% to 642.22, helped by strength in technology stocks.

AI remained a key theme after Reuters reported that Anthropic‘s planned public debut could value the company at more than US$2 trillion, while the company plans to spend US$518 billion on cloud computing and infrastructure.

The AI focus also helped support US technology futures, with Nasdaq 100 futures up 32 points, or 0.1%, while S&P 500 futures were broadly unchanged and Dow futures fell 40 points, or 0.1%, after higher Treasury yields weighed on Wall Street in the previous session.

The dollar remained firm as elevated US Treasury yields and uncertainty over the duration of the Middle East conflict supported demand for the US currency, with the euro down 0.29% at US$1.1338 and sterling down 0.24% at US$1.3223.

The yen fell 0.11% to US$0.0063, while the yuan gained 0.08% to US$0.1491, and the dollar index was on course for its first monthly rise since June.

Gold also advanced, rising US$14.14, or 0.34%, to US$4,149.90 an ounce as investors continued to seek a hedge against geopolitical and inflation risks.

In the UK, economic data presented a mixed picture, with consumer borrowing rising at its fastest annual pace since records began in 1993 while mortgage approvals fell to 54,918 in August, their lowest level since December 2023. 

The weakness in mortgage approvals, which fell from a revised 55,928 in July, suggests higher borrowing costs are weighing on housing demand, while shop price inflation eased to 1.4% from 1.5% as retailers increased promotions to limit the impact of higher costs.

Markets are also watching the UK government’s tax plans ahead of the Budget, after Chancellor John Healey highlighted the country’s comparatively low capital gains tax rates, fuelling speculation over a possible increase, while the existing main rates remain 18% and 24%. 

At the corporate level, Vesuvius shares rose 27% to 477p on Tuesday, after the British engineering group said it was assessing a £1.37 billion cash-and-stock offer from RHI Magnesita. The shares had opened at 369p and reached an intraday high of 494p, compared with Monday’s close of 374.4p.

11:00 am BST: London indices holding on 

The FTSE 100 is up over 28p, or 0.27%, to 10,713.28, led by gains in healthcare, industrial and consumer-facing stocks, with ConvaTec, Halma and InterContinental Hotels Group among the biggest risers.

The FTSE 250 has gained 72p, or 0.30%, to 24,407.45.

Small caps roundup

Incanthera PLC (AQSE:INC) used its preliminary results to outline its transition towards a skincare technology supplier, working through partners rather than selling directly to consumers.

New chief executive Stuart Robertson, who joined in June, said the strategy is to expand through partners that offer scale, established routes to market and access to new customers.

Zanaga Iron Ore Co Ltd (AIM:ZIOC, FRA:6ZA) highlighted in its interim results that work to improve the economics of its Republic of Congo iron ore project has identified around $2.2 billion of potential cash-cost savings.

The update comes as talks continue over a proposed strategic investment and up to $500 million of potential project financing.

Tribal Group PLC (AIM:TRB), the education software company, faces a possible 111p-a-share cash offer from its largest shareholder, Jenzabar, setting up a rival proposal to the £231.2 million sale agreed with Main Capital Partners.

The approach follows Tribal’s agreement to improved terms with Main Capital, which is acquiring the company through Thames Bidco for about 105p a share.

 Shares in Smiths News PLC (LSE:SNWS) (Smiths News PLC (LSE:SNWS)), the newspaper and magazine wholesaler, climbed nearly 8% to an intraday high of 72.8p on Tuesday after the company said full-year results would beat market expectations.

Trading in the year ended 29 August was stronger than expected.

Ariana Resources PLC (AIM:AAU, ASX:AA2, FRA:4A6) reported a sharp increase in first-half profit and ended June with £17.3 million in cash after monetising part of its Turkish mining interests to fund development of its flagship Dokwe gold project in Zimbabwe.

Rockfire Resources PLC (LSE:ROCK) has started work on a maiden JORC Inferred germanium resource estimate for its Molaoi deposit in Greece, with results expected within four weeks alongside an updated zinc resource.

S&U PLC (LSE:SUS) says it is well placed to navigate a challenging economic and political backdrop as it prepares fresh funding to support its growth plans.

Chairman Anthony Coombs cited St Paul’s letter to the Galatians, saying the motor and property lender’s current trends suggested its strategy was beginning to bear fruit for customers and shareholders.

10.00 am BST: Weir heads engineering-led advance

Weir Group climbed 2.3% to 2,694p to lead the FTSE 100 as industrial engineering shares moved to the top of London’s leaderboard.

Halma gained 2.2%, while Spirax Group and IMI advanced about 2%, pointing to a wider sector move rather than a company-specific surge.

The FTSE 100 held a 33-point gain at 10,717 after giving back a small portion of its earlier advance.

Healthcare shares also remained supportive, with GSK gaining 2% and AstraZeneca advancing 1.9%, while InterContinental Hotels Group added 2%.

The FTSE 250 rose 54 points, or 0.2%, to 24,389, while the AIM All-Share gained 0.2% to 785.

 

9.00 am BST: London rally broadens beyond miners

The FTSE 100 was 35 points, or 0.3%, higher at 10,720 as its early mining-led advance broadened into healthcare and industrial shares.

GSK climbed 2.1%, AstraZeneca gained 1.9%, while Halma, Spirax Group and Weir Group added between 1.5% and 1.6%.

The FTSE 250 rose 0.3% to 24,406, led by Vesuvius, which surged 24.6% after disclosing a takeover proposal from RHI Magnesita worth 551p a share. Close Brothers gained 10.8% following its annual results.

AIM edged 0.2% higher to 785.

Utilities, telecoms and retailers lagged, with Ithaca Energy down 2.5%, SSE off 2%, Vodafone losing 1.8%, and Tesco, Kingfisher and Sainsbury’s falling more than 1%.

 

8.15 am BST: Mining shares drive opening gains

London shares opened modestly higher, with the FTSE 100 gaining 18 points, or 0.2%, to 10,703 as miners recovered from Monday’s sector-wide sell-off.

Antofagasta led the blue-chip risers with a 2.1% gain, while Anglo American advanced 1.8%, Fresnillo rose 1.5% and Rio Tinto added 1.3%.

Mining equipment supplier Weir Group gained 1.1%, reinforcing the sector-wide pattern.

AstraZeneca climbed 1.3%, while InterContinental Hotels Group and Burberry rose 1.2% apiece, showing support beyond resources.

The FTSE 250 advanced 0.2% to 24,379, while the AIM All-Share gained 0.1%.

7.00 am BST: London points higher despite weak global handover

The FTSE 100 is expected to open 6 points, or 0.1%, higher at 10,691 after closing 0.1% lower at 10,684.88 on Monday as weak miners offset a rally among housebuilders.

UK shop-price inflation eased to 1.4% in September from 1.5% in August as retailer promotions reduced food-price pressures, although the rate remained above its three-month average of 1.3%.

Wall Street provided a negative handover after the S&P 500 fell 0.8%, the Dow Jones Industrial Average lost 0.7%, and the Nasdaq Composite declined 0.9% as the US 10-year Treasury yield reached its highest level since 2007.

Asian markets followed New York lower, with Japan’s Nikkei 225 down 1.4%, Hong Kong’s Hang Seng falling 0.7% and the Shanghai Composite slipping 0.1%, while Australia’s ASX 200 edged 0.1% higher after the Reserve Bank of Australia raised its cash rate by 0.25 percentage points to 4.6%.

Brent crude traded near $107.55 a barrel, offering potential support to BP and Shell, while gold recovered to $4,133.89 an ounce and copper futures gained 0.3% to $6.63 a pound.

Sterling weakened to $1.3233, while Bitcoin changed hands near $83,300 following a 3.4% decline over the past week.

Investors will watch UK mortgage approvals at 9.30 am, with economists expecting an increase to about 57,000 from 56,053.