The FTSE 100 is expected to open sharply lower on Thursday after a hawkish tone from the US Federal Reserve triggered a broad sell-off on Wall Street.
Futures indicate London’s benchmark index will fall around 75 points, or 0.7%, to 10,828, after closing 0.3% higher at 10,908.41 on Wednesday.
The Fed left interest rates unchanged for a fifth consecutive meeting, keeping the federal funds target range at 3.50% to 3.75%, although the decision was split, with three policymakers voting in favour of a quarter-point increase.
Federal Reserve Chair Kevin Warsh reiterated the central bank’s commitment to returning inflation to target, saying policymakers remained “laser focused” on price stability and would not hesitate to act if necessary.
Wall Street reacted negatively, with the Dow Jones Industrial Average falling 2.2%, the S&P 500 losing 1.5%, and the Nasdaq Composite declining 1.7%.
After the close, earnings from US technology giants produced mixed reactions. Microsoft surged almost 9% in pre-market trading after beating expectations, while Meta Platforms fell 7.5% after disappointing results and increasing spending forecasts.
Investors are now turning their attention to the Bank of England’s interest rate decision later on Thursday, where policymakers are widely expected to leave rates unchanged.
Meanwhile, geopolitical tensions continued to support energy markets after the US launched strikes against Iranian military targets in response to attacks on American bases in Jordan. Brent crude climbed to US$90.91 a barrel, while gold edged higher to US$4,034.78 an ounce.
The UK corporate calendar is busy, with half-year results due from Rolls-Royce, Lloyds Banking Group, Anglo American and Rentokil Initial.
