Tuesday brought little in the way of fresh conviction for investors. The widely awaited US labour market figures, as so often, painted a mixed picture. Rather than clarifying the economic trajectory, they prolonged the uncertainty. On the one hand, unemployment hit its highest level since 2021. On the other, job creation was slightly more robust than forecast. Expectations for interest rate movements remained largely unchanged. The Federal Reserve continues to signal that just one rate cut may be in store for 2026, while privately anticipating two. Markets are pricing in two, while quietly hoping for three. Stephen Miran, Donald Trump's Trojan horse within the Fed, is dreaming of ten.

Amid the cacophony of speculation from economists, policymakers, analysts, influencers and bookmakers, US tech stocks quietly gained ground. The Nasdaq 100 managed to halt its three-day losing streak with a modest 0.3% rebound. Investor confidence in the AI narrative is far from restored, but the slide has at least paused. However, a sharp decline in oil prices dragged down the S&P 500 and the Dow Jones, with steep falls for several energy names including Chevron and Phillips 66. The drop in crude, initially fuelled by hopes of peace in Ukraine, was partially reversed overnight following President Donald Trump's announcement of a naval blockade against Venezuelan tankers. Nevertheless, both Brent and WTI are trading well below recent averages, under USD 60 a barrel.

Hopes for a negotiated resolution to the Ukraine conflict and the collapse in oil prices had a significant knock-on effect in Europe. The Stoxx Europe 600 fell 0.5%, weighed down by energy heavyweights such as Shell, BP Plc and TotalEnergies, and defence contractors including Airbus, Thales, BAE Systems and Hensoldt.

Focus will now turn squarely back to US economic policy—if indeed it ever left. November's US inflation data, due tomorrow, is expected to show a 3% year-on-year rise in both headline and core CPI. This will be the first fresh inflation reading in weeks, following delays caused by shutdown-related turmoil, and is seen as crucial for rate expectations. Before that, Donald Trump is scheduled to deliver a key televised address this evening, likely centered on the economic outlook. Under pressure even within his own party over the imbalances caused by his policies, the President is seeking to reassert control of the narrative. He has already deployed his most loyal messengers to spread a sort of 'marshmallow theory': forgoing short-term gratification in exchange for longer-term prosperity. It's a politically awkward pitch for a man more associated with instant results.

In Europe, the macroeconomic counterweight comes tomorrow with rate announcements from the ECB and the Bank of England. The former is expected to stand pat, while markets anticipate a 25-basis-point cut from the latter.

On the corporate front, the AI sphere is hoping that Micron's results, due this evening, will rekindle enthusiasm. Recent updates from the sector - notably from Oracle and Broadcom - do not bode well, but hope springs eternal. Valued more like a European carmaker than a hyped tech stock, Micron is far from the most flamboyant name in the space. AI continues to thrill investors, particularly outside the US, as evidenced by the astonishing 700% surge in shares of Chinese chipmaker MetaX Integrated Circuits Shanghai at its IPO this morning. There are only two possible conclusions: either the underwriters are woeful at pricing, or investors are foolish enough to pay a ludicrous premium just for the spectacle. You know the answer. At least, I think I do.

In a separate development, the Trump administration has launched a fresh salvo at the European Union over its plans to tax American tech giants. It has hinted at potential retaliatory measures targeting European firms operating in the US. The Office of the US Trade Representative even went so far as to name potential casualties: Capgemini, Publicis, DHL, Amadeus, SAP SE, Accenture, Siemens AG, Spotify and even Mistral.

The tentative calm observed on Wall Street yesterday is offering some support to Asia-Pacific markets, although several bourses are treading water. That is the case in India, Australia and Taiwan. Japan is showing a touch more optimism (+0.3% for the Nikkei 225), while China and South Korea are attempting more assertive rallies, buoyed by gains in their tech sectors. European indices are expected to open slightly higher in early trading.

Today's economic highlights:

On today's agenda: in Japan, the adjusted trade balance; in the United Kingdom, the CPI GM and the HICP GA; in Germany, the IFO business climate, the IFO current assessment, and the IFO expectations; in the eurozone, the CPI GM, the CPI GA, and the labor costs GA; in the United States, the retail sales advances GM, the business inventories, and the DOE crude oil inventories. See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$4,323.15
  • Crude Oil (BRENT): US$59.71
  • United States 10 years: 4.16%
  • BITCOIN: US$86,747.6

In corporate news:

  • BAE Systems reduces its stake in Air Astana by approximately 8% through an accelerated bookbuild of Global Depositary Receipts (GDRs).
  • Polestar Automotive Holding UK PLC secures a term loan facility worth up to USD 600 million.
  • Saga Plc partners with Ageas to launch motor and home insurance, with Ageas managing operations and Saga retaining its brand.
  • Tesla plans to invest approximately €1 billion to expand battery cell production at its Gruenheide Gigafactory in Germany.
  • Ariston Group to acquire Riello Group for €289 million, strengthening its position in the Italian thermomechanical sector.
  • KPN vacates its office and data center in Apeldoorn.
  • Pepco Group plans to divest Dealz in 2026, targeting at least 9% growth in core earnings and opening 250 new stores.
  • Deutsche Bank increases its target price for A.P. Moller-Maersk to 12,970 Danish krone with a hold recommendation.
  • OpenAI appoints George Osborne to lead global expansion and explores a potential $10 billion investment from Amazon.
  • GSK receives U.S. FDA approval for Exdensur as an add-on treatment for severe asthma and chronic sinus inflammation.
  • Warner Bros Discovery set to reject Paramount's $108.4 billion takeover bid, informing shareholders of a vote on the decision.
  • Boeing secures a $931 million contract to extend the flight hours of Navy Super Hornets.
  • Waymo seeks to raise multi-billion-dollar funding to achieve a $100 billion valuation.

See more news from UK listed companies here

Analyst Recommendations:

  • Bunzl Plc: JP Morgan maintains its overweight recommendation and reduces the target price from GBP 26.90 to GBP 25.80.
  • Anglo American Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 3100 to GBX 3400.
  • Antofagasta Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 2900 to GBX 3300.
  • Domino's Pizza Group Plc: Rothschild & Co Redburn maintains its sell recommendation and reduces the target price from GBX 169 to GBX 150.
  • Atalaya Mining Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 760 to GBX 930.
  • Molten Ventures Vct Plc: Berenberg maintains its buy recommendation and raises the target price from CAD 79 to CAD 85.
  • Fresnillo Plc: Berenberg maintains its buy recommendation and raises the target price from GBX 2600 to GBX 3400.
  • Glencore Plc: Berenberg upgrades to buy from hold and raises the target price from GBX 350 to GBX 480.
  • Itv Plc: Bernstein maintains its market perform recommendation and raises the target price from GBX 74 to GBX 76.
  • Admiral Group Plc: RBC Capital maintains its outperform recommendation and reduces the target price from GBX 4100 to GBX 3600.
  • Whitbread Plc: Peel Hunt maintains its buy recommendation and reduces the target price from GBP 35 to GBP 27.50.