S&P 500 slips as Trump rhetoric fades and oil steadies

The S&P 500 closed lower on Wednesday after financials fell, while the Nasdaq edged higher late in the session as Nvidia and Alphabet rose. In the UK, the FTSE 100 pulled back from record highs, ending lower as banks and energy stocks declined, with NatWest dropping after a broker downgrade. The US dollar held steady early on Thursday against sterling and the euro ahead of the US jobs report. Gold slipped in early trading, while oil prices rose after a sharp US inventory draw and fresh developments involving Venezuela.

Equities

The FTSE 100 fell 0.7% on Wednesday, closing lower after pulling back from a series of record highs reached earlier in the week. The index slipped as energy, financial and precious metal stocks dropped, while investors kept a close eye on developments linked to Venezuela and US foreign policy. The more domestically focused FTSE 250 ended the session 0.4% higher, remaining close to a four-year high, while the FTSE Small Cap index finished 0.1% lower after briefly trading near its 2021 peak earlier in the day.

Among UK-listed companies, banks weighed heavily on the blue-chip index. NatWest Group shares closed 4.3% lower on Wednesday after Barclays cut its rating to “equal-weight” from “overweight”, following three sessions of gains. Energy stocks also dragged on the market, with the sector down 3.3% after crude prices slipped. The move came after US President Donald Trump said late on Tuesday that he had reached an agreement to import up to $2bn of Venezuelan crude. In contrast, defence shares rose, with the sector ending 1.7% higher on Wednesday as US military action involving Venezuela raised geopolitical tensions.

Away from the large caps, Topps Tiles shares closed 4.3% higher on Wednesday after the retailer reported a 3.7% rise in first-quarter revenue, citing steady demand from builders and contractors. Edinburgh Worldwide Investment Trust ended the day 2.9% higher after its largest shareholder, Saba Capital, renewed calls for a new independent board following the sale of part of the trust’s SpaceX holding.

In the US, stock markets ended mixed on Wednesday. The S&P 500 closed 0.34% lower at 6,920.93, while the Dow Jones Industrial Average fell 0.94% to 48,996.08. Both indices had touched record intraday highs earlier in the session before turning lower. The Nasdaq bucked the trend, closing 0.16% higher at 23,584.28, supported by gains in large technology stocks.

Financial shares weighed on US markets late on Wednesday. JPMorgan Chase shares closed 2.3% lower after Wolfe Research downgraded the bank to “peer perform” from “outperform”. Blackstone and Apollo Global Management both ended more than 5% lower after Trump said his administration would move to ban Wall Street firms from buying single-family homes. American Homes 4 Rent closed down 4.3% on the same news, while Zillow ended the session more than 2% higher.

Technology stocks lifted the Nasdaq late on Wednesday. Nvidia and Microsoft both closed about 1% higher, while Alphabet finished more than 2% higher as investors returned to AI-related shares. Elsewhere, defence stocks fell sharply, with Northrop Grumman closing 5.5% lower and Lockheed Martin down 4.8% after Trump said defence contractors would face restrictions on dividends and buybacks.

Forex & Commodities

The US dollar was steady in early Asian trading as investors assessed a mixed run of American economic data ahead of Friday’s closely watched jobs report. The dollar index was little changed at 98.74 early this morning, holding near a more than two-week high. Against the euro, the dollar was broadly flat, with the single currency trading at $1.168, slightly lower over the week as markets awaited euro zone sentiment data. Sterling edged down on the day to $1.346, though it remained close to the near four-month high reached earlier in the week.

Recent US data releases have pointed in different directions. Figures published on Wednesday showed job openings fell more than expected in November, reinforcing signs of a labour market that is cooling without a sharp rise in unemployment. At the same time, services sector activity picked up unexpectedly in December, suggesting the US economy ended last year with some underlying momentum. Markets continue to expect the Federal Reserve to leave interest rates unchanged at its January meeting, with attention firmly on Friday’s non-farm payrolls report to shape expectations for the rest of 2026. A potential US Supreme Court ruling on President Donald Trump’s tariff policies later on Friday is also being watched for its possible impact on the dollar.

Gold prices slipped as the firm dollar weighed on demand ahead of the US jobs data. Spot gold was trading lower at $4,436 per ounce at around 5:40am GMT, moving further away from the record high set late in December. Other precious metals also pulled back, with silver down at $76.08 per ounce after its recent peak, and platinum trading lower at $2,231 per ounce early this morning.

Oil prices rose after two days of declines. Brent crude was higher at $60.25 a barrel, while US West Texas Intermediate traded up at $56.25 a barrel by mid-morning. The move followed data showing a larger-than-expected draw in US crude inventories last week. Developments involving Venezuela remained in focus after the US seized two Venezuela-linked oil tankers on Wednesday and confirmed a deal to access up to $2bn worth of Venezuelan crude, adding another layer of uncertainty to oil supply flows.