AMD Slides as Gold Climbs Before US Payrolls

Summary

AMD came under renewed pressure as investors questioned continued AI infrastructure spending, contributing to weaker sentiment across global technology shares after Wall Street's decline. Gold extended its recent rally to a seven-week high as the US dollar remained under pressure ahead of Friday's US payrolls report, while Brent crude edged higher as markets monitored negotiations over the Strait of Hormuz. The FTSE 100 is set to follow mixed global markets, with Medicover agreeing to sell its India hospital business to KKR and Henkel raising its 2026 growth guidance.

Equities

The FTSE 100 closed marginally higher on Wednesday, adding 0.01% to finish at 10,888.3, while the FTSE 250 climbed 0.7% to another record closing high. Strong corporate earnings helped support the market, although gains were limited by weakness in banking shares following reports that China plans to tax returns from offshore insurance products.

Next led the FTSE 100, closing 6.9% higher on Wednesday after raising its annual profit outlook for the third time this year, reflecting continued confidence in trading performance. Glencore gained 4.1% after reporting an 86% jump in first-half earnings, driven by its commodity trading division, and also announced plans to pursue a secondary listing in Australia. AstraZeneca rose 2.9% after Reuters reported there were no active discussions with Bristol Myers Squibb regarding a potential takeover approach.

Banking shares came under pressure after reports that Chinese tax authorities had begun taxing returns from offshore insurance products. Prudential fell 6.4%, while HSBC lost almost 5%. Rio Tinto and Antofagasta also finished higher as copper prices reached their strongest level in 12 weeks, helping offset weakness in the energy sector as volatile oil prices weighed on oil producers.

In the US, the S&P 500 reached its first record closing high in two months earlier this week and has now risen around 13% so far this year. Investors have become more confident after another strong earnings season, with more than three-quarters of S&P 500 companies having reported results and second-quarter earnings currently on course to increase by 31.1%, the fastest pace since 2021. Valuations have also become more attractive following the technology sector pullback earlier this summer.

Large technology companies remain central to the rally after Microsoft, Alphabet, Amazon and Meta reassured investors that heavy investment in artificial intelligence infrastructure continues to generate returns. Goldman Sachs estimates that these companies, together with Oracle, will spend almost $800 billion on capital expenditure this year, supporting demand across the semiconductor industry. Investors are continuing to monitor Treasury yields, however, as higher borrowing costs remain one of the main risks for US equities over the coming months.

Forex & Commodities

The US dollar remained under pressure early this morning, with the dollar index holding close to a six-week low at 99.65 as investors adopted a cautious approach ahead of Friday's closely watched US non-farm payrolls report. The Japanese yen traded little changed at 157.7 per US dollar after surrendering part of the strong gains made earlier this week following coordinated currency intervention by Japan and the US, although it remained well above last month's multi-decade low. Elsewhere, the euro was steady at 1.156 against the US dollar, while sterling held firm at 1.347. The Australian dollar traded at 0.7056 and the New Zealand dollar at 0.5885, with currency markets largely waiting for fresh economic data before taking a clearer direction.

Spot gold rose for a fourth consecutive session early this morning, climbing to a seven-week high of $4,265 per ounce before easing slightly while remaining close to that level. The precious metal continued to benefit from a softer US dollar and lower US Treasury yields, with investors also responding to signs of weaker private-sector hiring ahead of Friday's official US employment report. Markets have become less convinced that the Federal Reserve will need to tighten monetary policy further, with expectations for a September interest rate increase easing to around 55%. Investors will now look to the payrolls figures for further evidence on the strength of the US labour market and the likely direction of interest rates.

Oil prices edged lower this morning as progress in talks between Iran and Oman increased optimism that shipping through the Strait of Hormuz could move closer to normal operations. Brent crude traded at $79.12 a barrel, while US West Texas Intermediate stood at $74.80, with both contracts remaining near the levels seen after the US and Iran reached an interim peace agreement in June. However, uncertainty continued to limit the decline in prices as renewed Houthi attacks on Saudi oil tankers highlighted ongoing security risks in the region. Gulf crude exports also remained around 40% below pre-war levels, showing that energy supplies have yet to fully recover despite the diplomatic progress.