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Wall Street up, FTSE closes in the green as concerns about the Fed’s interest rate cycle resurface

A look at how the major markets are performing on Monday

FTSE WASHINGTON, DC - JULY 28: Federal Reserve Chairman Jerome Powell participates in a meeting of the Financial Stability Oversight Council at the U.S. Treasury on July 28, 2023 in Washington, DC. The council met to deliver an update on the Council’s Climate-related Financial Risk Committee and spoke on the transition from LIBOR. (Photo by Kevin Dietsch/Getty Images)
Wall Street rose while the FTSE closed in the green as concerns about the Fed’s interest rate cycle resurface. Photo: Kevin Dietsch/Getty (Kevin Dietsch via Getty Images)

US markets were trading in the green on Monday with the S&P 500 (^GSPC) up 0.3%, the Dow (^DJI) rising 0.1% and the Nasdaq (^IXIC) gaining 0.5%.

"Investors in Europe and the US are preparing for a volatile week as the economic docket is full of fireworks," said Naeem Aslam, chief investment officer at Zaye Capital Markets.

"Since last week, concerns about the Fed’s interest rate cycle have begun to surface once again, as many speculators believe that there are greater chances that the Fed will use more gunshot in terms of interest rate going into the next month's meeting."

In London, the pound and FTSE were positive as upbeat markets continued to digest comments made last week by Bank of England chief Andrew Bailey.

Bailey said that the central bank is "much nearer" to the peak of its rate hiking cycle, meaning hopes of the end of high rates.

The FTSE 100 (^FTSE) headed 0.8% higher after the opening bell before retreating back down to trade around 0.4% higher at the close. Meanwhile the DAX (^GDAXI) in Germany was up 0.5% and the CAC (^FCHI) rose 0.8%.

The pound (GBPUSD=X) rose past the $1.25 mark, up 0.5% by Monday afternoon in London.

The rise was partly spurred by confidence on home turf, and a pullback in the dollar following comments from US Treasury secretary Janet Yellen that she is "feeling very good" about the US's economic position. This is the pound's first gain in a week.

Stay with us for live coverage throughout the day:

Live coverage is over
  • Lucy Harley-mckeown

    A member of the Bank of England's Monetary Policy Committee has said she would rather "err on the side of over-tightening" in the absence of good information about inflation, a signal that rates may stay higher for longer in the UK.

    "If I am wrong, and inflation decelerates more quickly and activity deteriorates more significantly, I will not hesitate to cut rates," added Catherine L Mann at the Canadian Association for Business Economics earlier today.

  • Lucy Harley-mckeown

    Oil on the up

    Here we have IG's Chris Beauchamp looking at what's making oil prices tick today:

    Oil prices have moved back towards last week’s highs, as if to remind investors of the risks of resurgent inflation. Barring a sudden supply increase or a dramatic downturn in data, there seems little reason to think any sustained weakness in crude prices is at hand.

  • Lucy Harley-mckeown

    And here's Zuhur Jabir Umran has more on what's going on in retail today

    Tesco, Marks & Spencer and B&Q urge Chancellor to freeze business rates amid closures

    The chief executives of 44 retailers including Tesco (TSCO.L), Marks & Spencer (MKS.L) and B&Q have urged the chancellor to freeze property taxes to tackle soaring inflation rates.

    A letter, addressed to Jeremy Hunt, was signed by 44 of Britain’s biggest retailers, calling for action to be taken to freeze business rates which is due to increase in April 2024.

    The retail industry pays over £7bn a year in business rates and is expected to increase by over 6%, amounting to an increase of over £400m, the British Retail Consortium (BRC) said.

    This comes after Wilko announced the closure of 400 stores after failing another rescue deal that could have saved the cash-strapped retailer from permanently shutting down.

  • Lucy Harley-mckeown

    Here are our trending tickers, as US markets open:

    Trending tickers: Tesla | BMW | Vistry | The Restaurant Group

    Yahoo FinanceA look at the stocks making headlines on Monday.

  • Lucy Harley-mckeown

    A fresh update from the Treasury. Indian firms could get the green light for London listings:

    Indian firms could soon list in London, it has been announced as part of a package of plans revealed today by the Chancellor Jeremy Hunt alongside Indian Finance Minister Nirmala Sitharaman, as they met in Delhi.

    The news that India will explore potential London listings follows recent changes to Indian regulation to allow domestic companies to access global markets and underlines the UK capital’s strength as a hub for international capital raising.

  • Lucy Harley-mckeown

    Tesla's robo-driving lift

    Tesla (TSLA) shares were up more than 6% in premarket trading on Monday as it was upgraded from a "hold" to a "buy" by analysts at Morgan Stanley.

    Morgan Stanley thinks the company's new DoJo supercomputer could increase its market value by $500bn (£399.4bn), with the possible rise of robocars and network services.

  • Lucy Harley-mckeown

    And here's Zuhur Jabir Umran with an update on the Wilko administration:

    Last-minute attempt to rescue Wilko falters

    A last-minute attempt to rescue Wilko, the discount high street retailer, has fallen through, with 400 remaining stores set to shut by October, according to GMB Union and Sky News.

    HMV owner Doug Putman, who previously rescued the music giant back in 2019, had been in talks with Wilko about potentially buying as many as 400 of its stores. But the attempt failed as rising costs proved to complicate the deal.

    Thousands of staff are likely to lose their jobs after the retailer falls into administration. Administrators from PwC are to announce details of further closures and redundancies, according to a report.

    The chain said it had collapsed into administration in August and was forced into insolvency, raising concerns over the future of its 400 stores and 12,500 employees.

  • Lucy Harley-mckeown

    The Restaurant Group (RTN.L) is dining out

    Wagamama owner The Restaurant Group (TRG) is on the up today, with stock rising 5.3%. The bump came after it revealed it is set to slim down its portfolio with the sale of chains Frankie & Benny's and Chiquito to the owner of Cafe Rouge.

    TRG will pay Big Table Group £7.5m to take 75 restaurants off its hands.

    The deal is set to close in October, but TRG will continue to provide some services until the end of March next year.

  • Lucy Harley-mckeown

    Miners doing some heavy FTSE lifting

    Mining stocks were propping up London's top index on Monday, buoyed by consumer price data in China.

    “The reading, which emerged over the weekend, implies an improvement in the commodities demand picture and in turn provides a boost to the resources sector," said AJ Bell investment director Russ Mould.

  • Lucy Harley-mckeown

    Here's an update from Yahoo Finance UK's Zuhur Jabir Umran:

    Here are the top risers and fallers in the FTSE as of 10.05am:
    Fresnillo (FRES.L), 👆 5.9%
    Persimmon (PSN.L), 👆 4%
    Anglo American (AAL.L) 👆 2.8%

    And the fallers
    Melrose (MRO.L), 👇 3.3%
    Halma plc (HLMA.L), 👇 1%
    AztraZeneca plc (AZN.L), 👇 1.2%

Watch: Markets in 3 Minutes: This ss the dollar's big turning point

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