The FTSE 100 looks set to ease back at the open, with futures pointing to a drop of around 28 points as investors step back after Tuesday’s record-breaking run. After pushing into uncharted territory, a note of caution has crept in, with markets showing early signs of vertigo as they pause to reassess the global backdrop.
Asian markets sent mixed signals overnight as Wall Street’s early-year momentum softened. Japan’s Nikkei 225 slipped 1%, while South Korea’s Kospi rose 0.6% to 4,551.06. Both had closed at record highs just a day earlier. Australia’s S&P/ASX 200 edged up 0.2% to 8,695.60, while China was more subdued: Hong Kong’s Hang Seng Index fell 1.1% and the Shanghai Composite Index was little changed.
The geopolitical backdrop remains unsettled. Markets are continuing to digest the fallout from a US raid that led to the capture of Venezuelan president Nicolás Maduro, alongside renewed foreign policy rhetoric from Donald Trump.
Despite that, Wall Street is still setting the tone. US stocks climbed again on Tuesday, led by technology shares. The Dow Jones Industrial Average rose 1%, while the S&P 500 and the tech-heavy Nasdaq Composite both gained 0.6%.
Attention is now shifting back to monetary policy. The Federal Reserve meets later this month, with interest rates widely expected to remain on hold after three cuts late last year. US Treasury yields edged higher, with the 10-year at 4.16% and the two-year at 3.46%.
In commodities, oil prices slipped, while gold eased 0.3% and silver fell 1.5%. Currency markets were relatively calm: the dollar softened against the yen, while the euro ticked slightly higher against the US currency.
