However unpredictable Donald Trump may be, his strategy is relatively clear and his reactions are now well understood by financiers. AI is another matter entirely. The upheavals it is expected to unleash are hard to pin down. Some warn they will be vertiginous in scale and breathtaking in speed. That is why certain sectors are being crushed while others are propelled to the heights of the market. Broadly speaking, anything liable to be replaced, or at the very least reshaped, by an AI agent is at risk. Software, for instance. As is everything that has built its prosperity on the assumption of unending growth in the technology sector, private equity being a case in point. And then there is everything else, of course, since so many industries are interconnected. Aspirin manufacturers, crispbread vendors and copper miners have suddenly become intensely fashionable once again.

We are therefore in a phase defined by fear of the unknown. In some respects, that is entirely legitimate: AI represents a seismic disruption. Market nervousness is being amplified by extreme narratives. That was again evident yesterday with the circulation of a paper produced by Citrini Research, a popular US-based finance account on Substack. Its authors explore a worst-case scenario in which AI triggers a major crisis, not in 2035 but as early as 2028. Entitled “The Intelligence Crisis of 2028”, the text describes a world in which unemployment soars as a result of AI agents and numerous sectors are destabilised by a shockwave of extraordinary violence, particularly in payments and software. A genuine bloodbath among white-collar workers. The economist Ed Yardeni notes that the market is asking whether Frankenstein is already at the door: is the monster created by the tech industry beginning to devour its creator?

The wags at Alphaville, in the Financial Times, marvel at the power of narrative to shake professional investors’ convictions in a matter of minutes. The impact of Citrini’s dystopian vision was considerable in yesterday’s session. The S&P 500 fell 1.04%, pushing it into negative territory for 2026. Payments companies were cut down to size. Software groups were ruthlessly marked lower. Banks and private equity firms were also swept into the storm. IBM plunged 13% following rumours that an AI agent developed by Anthropic could replace one of the group’s flagship solutions. Once again, AI.

In Europe, the relatively small size of the technology sector has almost become a selling point for investors, who have piled into defensive names. The two strongest performers on the Stoxx Europe 600 were food retailers Carrefour and Jeronimo Martins. AI agents may soon be able to do our shopping, but they are not yet capable of eating on our behalf. At least that is one certainty. Investors also favoured commodities, which will not be replaced any time soon: miner Fresnillo, with the added advantage of producing gold and silver, both highly sought after at present, and steelmaker ArcelorMittal were sharply higher. Add a measure of energy, to power AI agents, and telecommunications, the pipes through which AI travels, and one has most of the previous day’s winners on the continent. A touch of healthcare as well, although Novo Nordisk and its latest slump somewhat muddied the sectoral picture. Even so, losses prevailed in Europe: the Stoxx Europe 600 closed down 0.45%.

Aside from this all-pervasive AI theme, the newsflow is dominated by Donald Trump’s fury after the Supreme Court struck down part of the US tariff regime. The occupant of the White House has reintroduced new tariffs and brandished a series of threats of further increases. Several central bankers are due to speak today, in a session that will also be busy with corporate earnings. Standard Chartered, Telefonica, Edenred and others have already reported in Europe this morning. The Home Depot will follow at midday in the United States.

In the Asia-Pacific region, markets are enjoying a measure of relative calm. Euphoria continues in South Korea, where the KOSPI is up more than 2 %. Japan is recouping part of the previous day’s losses with a gain of 0.9 %. The Hang Seng, by contrast, is down 2 % after rising 2.5 % on Monday. Australia is edging lower. European futures are hesitant. Wall Street futures are slightly firmer, though volatility has ticked up a notch since yesterday.

Today's economic highlights:

On today's agenda: the one-year and five-year loan prime rates in China; business confidence in France; in the United Kingdom, the CBI distributive trades; in the United States, speeches from several Fed members, the S&P/Case-Shiller home price index, CB consumer confidence, and the API crude oil stock change. See the full calendar here.

  • GBP / USD: US$1.35
  • Gold: US$5,169.73
  • Crude Oil (BRENT): US$71.9
  • United States 10 years: 4.04%
  • BITCOIN: US$63,195.9

In corporate news:

  • Standard Chartered reported a 16% rise in full-year pretax profit for 2025 to $6.96 billion, but missed analyst estimates, and announced a $1.5 billion share buyback and a 65% increase in its full-year dividend.
  • Smith+Nephew signed a distribution deal with SI-Bone to add the iFuse TORQ implants to its portfolio for pelvic fracture fixation procedures.
  • BAE Systems reported a rise in 2025 pretax profit to £2.57 billion, increased its dividend by 10%, and projected 7%-9% sales growth for 2026.
  • GSK renewed a five-year manufacturing partnership with Bora Pharmaceuticals, expanding access to multiple production sites.
  • SolGold shareholders approved its £867 million takeover by Jiangxi Copper, with the acquisition expected to finalize on March 4.
  • Allergy Therapeutics secured a new £40 million senior secured facility to replace its previous loan and continues to evaluate a potential Hong Kong listing.
  • Johnson Matthey extended the long-stop date for the sale of its Catalyst Technologies unit to Honeywell, reducing the sale price to £1.33 billion and planning to return £1 billion to shareholders.
  • JD Sports Fashion launched a £200 million share buyback program for fiscal 2027, starting with a £100 million tranche.
  • International Public Partnerships raised £42 million from the partial sale of its Moray East Offshore Transmission Owner stake and retained a 51% interest.
  • Herald Investment Trust reported an 8.5% increase in NAV per share for 2025 to 2,700.5p but saw a decline in profit and gains on investments year-over-year.
  • New vehicle registrations fell for the first time since June in January, down 3.5% to 961,382 vehicles, according to the ACEA.
  • Juventus posts a loss in the first half of the fiscal year.
  • Galapagos significantly improves its annual results.
  • OC Oerlikon forecasts an operating EBITDA margin of around 17.5% in 2026.
  • Saipem wins an offshore contract worth around 500 MUDS in Saudi Arabia with Aramco.
  • Tenaris announces that the company is ending the second tranche of its USD 1.2 billion share buyback program.
  • Wienerberger signs agreement to acquire Italcer Group.
  • A Azelis share placement took place at EUR 7.85 per share, according to market sources.
  • Solvay to reduce soda ash production capacity in Spain.
  • Dormakaba invests in US platform SwiftConnect.
  • IBM fell 13% yesterday after the announcement that Anthropic may have an agent capable of competing with the American giant's COBOL software.
  • FedEx is demanding reimbursement of customs duties imposed by the United States.
  • Warner Bros will review Paramount Skydance's new offer, but still recommends the deal with Netflix, according to Variety.
  • PayPal posted the biggest gain in the S&P 500 yesterday amid rumors of a possible takeover bid after the stock's decline.
  • Amazon is investing $12 billion in Louisiana for AI data centers.
  • Apple plans to manufacture the Mac mini in Houston, according to the WSJ.
  • Astellas is collaborating with Vir to develop its experimental prostate cancer drug.
  • Pfizer has entered into an agreement with Sciwind Biosciences for a diabetes drug.

See more news from UK listed companies here

Analyst Recommendations:

  • Cohort Plc: Peel Hunt initiates a buy recommendation with a target price of GBX 1430.
  • Chemring Group Plc: Peel Hunt initiates a buy recommendation with a target price of GBX 600.
  • Mony Group Plc: Morgan Stanley maintains its equal weight recommendation and reduces the target price from GBX 220 to GBX 180.
  • The Weir Group Plc: Oxcap Analytics downgrades to market weight from overweight with a target price of GBX 3300.
  • Standard Chartered Plc: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 2025 to GBX 2135.
  • Ig Group Holdings Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 13.50 to GBP 17.55.
  • Rio Tinto Plc: Freedom Broker maintains its hold recommendation and raises the target price from USD 76 to USD 97.
  • Johnson Matthey Plc: JP Morgan downgrades to neutral from overweight and reduces the target price from GBP 22.50 to GBP 20.
  • Ashmore Group Plc: Jefferies upgrades to buy from hold with a price target raised from GBX 170 to GBX 285.
  • Admiral Group Plc: Jefferies maintains its buy recommendation and reduces the target price from GBX 4100 to GBX 3580.
  • Glencore Plc: Jefferies maintains its buy recommendation and raises the target price from GBX 560 to GBX 590.
  • Fevertree Drinks Plc: RBC Capital maintains its sector perform recommendation and raises the target price from GBX 900 to GBX 1030.
  • Mondi Plc: Morgan Stanley maintains its underweight recommendation and reduces the target price from GBX 800 to GBX 780.