London’s FTSE 100 reversed early gains to close lower on Tuesday, 10 November, as stronger-than-expected US inflation figures revived concerns about further Federal Reserve interest rate increases, sending the dollar and Treasury yields higher while weighing on mining and energy shares.
The FTSE 100 fell 31.28 points, or 0.3%, to finish at 10,751.59, having earlier climbed to 10,868.51. The reversal followed Monday’s 109-point rally as investors reassessed the outlook for borrowing costs.
The FTSE 250 gained 40.31 points, or 0.2%, to 24,746.65, while the AIM All-Share declined 0.2% to 759.54.
European markets performed better, with France’s CAC 40 rising 0.6% and Germany’s DAX gaining 0.3%.
Wall Street moved lower following the release of October’s US consumer price index, with the Dow Jones Industrial Average down 0.6%, the S&P 500 falling 0.7% and the Nasdaq Composite losing 1% around the London close.
US consumer prices increased 0.4% month-on-month in October, according to the Bureau of Labor Statistics, slowing from September’s 0.6% increase but exceeding expectations of 0.3%.
More significantly, core inflation, excluding food and energy, rose 0.3%, above forecasts of 0.2% and matching the increases recorded in August and September.
The figures suggested that underlying inflationary pressures remained persistent, strengthening expectations that the Federal Reserve could increase interest rates at its December meeting.
TD Economics senior economist Leslie Preston highlighted the broad-based nature of price increases, noting that inflationary pressure had shifted from tariffs towards energy costs and demand for technology-related goods.
Barclays economist Pooja Sriram described the figures as the third consecutive upside surprise in core inflation, reinforcing expectations of another rate increase.
Morgan Stanley expects two further 25-basis-point increases, in December and March, warning that higher energy costs could feed into goods prices during the opening months of 2027.
Federal Reserve Governor Christopher Waller had also signalled support for a December increase, suggesting a larger move could be justified if inflation continued accelerating.
The stronger inflation reading pushed the US dollar higher and government bond yields upwards, placing pressure on commodities priced in dollars.
The benchmark US 10-year Treasury yield climbed to 5% from 4.88% on Monday, while the 30-year yield rose to 5.36%.
Sterling weakened to $1.3323 against the dollar, compared with $1.3415 the previous evening, and slipped to €1.1949 against the euro.
The euro declined to $1.1150, while the dollar strengthened to ¥158.79.
Gold fell to $4,025.90 an ounce from $4,116.80, weighing heavily on precious metals producers.
Fresnillo declined 4.7% to 2,513p and Endeavour Mining lost 4.3% to 4,099p, reversing some of their recent gains.
Copper producers also retreated, with Antofagasta falling to 3,234p and Glencore closing at 504.6p.
Brent crude eased to $91.74 a barrel, compared with $94.27 late Monday, amid continued hopes of a diplomatic resolution to the US-Iran conflict.
US Secretary of State Marco Rubio suggested that economic sanctions were reducing the immediate need for renewed military action, although no comprehensive peace agreement has been announced.
Lower oil prices weighed on energy companies, with BP falling 0.8% and Shell declining 2.1%.
Despite the wider market weakness, Marks & Spencer climbed 4.1% to 455.4p after outlining ambitious growth plans at its capital markets day.
The retailer aims to double sales in its Food division and achieve an operating margin of approximately 5%.
M&S also announced plans to double its financial 2027 dividend to 8.4p per share, from 4.2p, with subsequent distributions intended to grow at least in line with earnings.
In the FTSE 250, Funding Circle surged 13% after upgrading its full-year revenue expectations.
The small-business lending platform now forecasts 2026 revenue of at least £275 million, compared with previous guidance of £255 million, representing an increase of approximately 35% from 2025.
Among smaller companies, EDX Medical Group jumped 19% after announcing an agreement with US-based Caris Life Sciences to introduce its Caris MI Clarity breast cancer prognostic test in the UK.
The company said the test is designed to assess both shorter-term and longer-term recurrence risks, extending up to 15 years.
Artificial intelligence investment remained another focus after Anthropic announced plans for a major initial public offering on Nasdaq, with an indicative share price range of $70 to $78.
The Claude chatbot developer proposes an offering of 825 million Class A shares, comprising approximately 801.4 million new shares and 23.6 million shares sold by existing investors.
The proposed Class A offering would have a gross value of approximately $57.8 billion to $64.4 billion at the indicated price range, before any additional underwriter allotment.
The company also disclosed a separate $26 billion strategic private placement, taking its estimated combined net capital proceeds to approximately $84.6 billion, potentially increasing to $93.7 billion if the underwriters’ additional share option is fully exercised.
The proposed offering could value Anthropic at approximately $1 trillion, although final pricing and completion remain subject to market conditions and regulatory requirements.
Tuesday’s market performance highlighted the renewed influence of inflation and interest rate expectations on global equities, with stronger US price data offsetting optimism surrounding falling energy costs and recent gains in technology stocks.
The FTSE 100’s retreat from its intraday high reflected weakness in mining and energy companies, while positive corporate announcements supported selected consumer and financial shares.
Investors will now turn to Wednesday’s inflation figures from Germany and Ireland, a speech by European Central Bank President Christine Lagarde, and trading updates from ITV, Spirax and Taylor Wimpey, as markets assess whether further monetary tightening will undermine the recent recovery in equities.
