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Highlights
FTSE 100 futures point to a weaker open amid global geopolitical developments.
Market sentiment dampened by US tariff signals and instability in the Middle East.
Asia-Pacific markets echo cautious mood after volatile session on Wall Street.
London’s FTSE 100 index, composed of large-cap companies listed on the London Stock Exchange, is expected to open lower following a subdued performance across global markets. A combination of renewed tariff concerns from the US and escalating tensions in the Middle East have disrupted optimism stemming from recent US inflation data.
The FTSE 100 had previously closed slightly higher, but sentiment reversed overnight as geopolitical anxieties overshadowed economic signals. The retreat came despite earlier positive momentum linked to softer-than-expected US inflation figures, which had initially buoyed equities.
US Tariff Moves and Middle East Instability
The broader mood in financial markets shifted after the US administration signalled potential new tariffs, generating concern across international trade sectors. Additionally, developments in the Middle East further unsettled investors, with reports of increased military activity and uncertain diplomatic outcomes affecting global outlook.
US leadership confirmed a repositioning of its personnel in the Middle East, citing security threats. Parallel to this, nuclear negotiations with Iran appeared to stall, raising fears of heightened conflict in the region. These geopolitical dynamics were cited as key reasons behind the shift in sentiment during Wednesday’s US session.
Wall Street Closes Lower After Promising Start
In New York, major indices such as the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all ended the day in negative territory, despite opening on a stronger note. Early enthusiasm was driven by the announcement of a trade “framework” between the US and China, paired with a benign consumer price index reading.
However, momentum faded as geopolitical headlines dominated the latter half of the trading session. The reaction signalled a shift from focusing on economic data to broader external uncertainties, a trend echoed in the overnight performance of Asian equities.
Asia-Pacific Markets Track Global Sentiment
Equity indices across the Asia-Pacific region followed Wall Street’s lead, closing lower across key markets. In Tokyo, the Nikkei 225 retreated as uncertainty weighed on export-heavy sectors. The Shanghai Composite posted marginal losses, while the Hang Seng in Hong Kong recorded a sharper decline amid broader regional caution.
In Australia, the S&P/ASX 200 also slipped, extending the cautious tone. Investors in the region were seen responding not just to US economic signals, but to unfolding international developments that carry implications for energy prices and global supply chains.
UK Economic Indicators Awaited
In local economic updates, new data on UK gross domestic product is expected, with indications pointing toward a minor contraction in April. This follows modest growth in the prior month. The report will offer further insight into the resilience of the UK economy amid global pressures and could influence sentiment around domestic sectors listed on the FTSE 350.
Currency Markets and Sterling’s Performance
The pound strengthened slightly against the US dollar during early Thursday trading, reflecting broader currency adjustments amid shifting macroeconomic expectations. Traders were also seen responding to both local economic anticipation and global risk sentiment, adjusting positions accordingly.
