FTSE 100 Live: Stocks drop as US inflation woes outweigh soaring Nvidia sales
Welcome back to the City AM FTSE 100 liveblog.
The UK’s blue chip has taken a battering in early trading, as murky US inflation data overshadowed Nvidia’s sales triumph. While headline inflation fell back, the Fed’s preferred measure – the Personal Consumption Expenditures Price Index (PCE) – is still running hot at 3.7 per cent.
Investors will be closely watching Jackson Hole as the Federal Reserve’s annual conference gets underway. Fed chair Kevin Warsh could use his speech tomorrow to roll the pitch for future interest rate hikes.
Susannah Streeter, chief investment strategist at Wealth Club, said: “The Footsie may have flirted with fresh closing highs yesterday, but sentiment looks set to become more cautious as investors refocus on worries about inflation proving sticky, huge government debt piles and the prospect of interest rates lingering at elevated levels.”
Oil prices continued to fall amid reports that negotiations over a peace deal and the reopening of the Strait of Hormuz were gaining pace. The price of Brent crude – the international benchmark for oil – fell more than one per cent on Thursday morning to below $86 per barrel.
As Oman and Iran pursue a deal reopen the strait, President Donald Trump told Fox News that the vital shipping passage is already fully functional. In a bizarre rant, he said: “It’s a functioning Strait. Yes, every once in a while there’ll be a drone or a rocket or something shot, but it is a very functioning Strait.
In the week’s most hotly-anticipated trading update, chipmaking giant Nvidia beat analysts’ expectations again. The firm more-than-doubled its sales in the second quarter to $96.2bn, smashing expectations of $92.2bn.
But investors pounced on its 74 per cent gross margin guidance, lower than the 75 per cent hoped for by markets, triggering a post-close sell-off.
We’ll be bringing you the latest market updates and analysis.
This morning’s top stories:
- Burnham pledges to tackle ‘cost of business’ as firms fear Budget tax raid
- Mortgage rate hikes cost London homebuyers £35,000
- Use AI for investing at your own risk, warns watchdog
- Lloyds Bank and Halifax users unable to use app in latest outage
- Reform to slash HMRC officials’ pay if taxpayers wait too long