Early market roundup: Stocks mixed as investors await US data

Stock prices in Europe were mixed on Wednesday morning ahead of eagerly awaited US consumer price inflation data, which will test Federal Reserve interest rate expectations.

The FTSE 100 index opened down 11.73 points, 0.1%, at 10,832.46. The FTSE 250 edged up just 6.70 points at 24,806.45. The AIM all-share was up 1.74 points, 0.2%, at 801.31.

The Cboe UK 100 was down 0.1% at 1,076.77, the Cboe UK 250 was down 0.1% at 21,577.65, and the Cboe small companies was flat at 18,967.79.

In European equities on Wednesday, the CAC 40 in Paris was down 0.2%, but the DAX 40 in Frankfurt was up 0.2%.

The pound was steady at USD1.3510 on Wednesday morning, from USD1.3509 on Tuesday afternoon, and against the euro, it was flat at EUR1.1706.

The single currency bought USD1.1537 on Wednesday, down from USD1.1541 at the time of the closing bell in London on Tuesday. Against the yen, the dollar rose to JPY159.37 from JPY159.28.

The yield on the US 10-year Treasury eased to 4.68% on Wednesday from 4.69% on Tuesday. The yield on the US 30-year Treasury narrowed to 5.23% from 5.24%.

"Friday's soft US jobs data did not weigh heavily on the dollar. The prevailing view here is that inflation trends will primarily drive the next Fed move. These are on show today in the form of the US July CPI release," ING analyst Chris Turner commented.

"Here, consensus is looking for a reasonably subdued set of numbers: 0.1% month-on-month for headline and 0.2% for core. These would see the year-on-year rates drop to 3.4% and 2.5% respectively – inching closer to the Fed's 2% inflation target. Driving the softer numbers are expected to be lower gasoline prices, broadening signs of rental deflation and soft wages."

According to consensus cited by FXStreet, a slowdown in the annual rate of US inflation to 3.4% in July from 3.5% in June is expected. The data is released at 1330 BST.

In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 down 0.3% and the Nasdaq Composite down 0.6%.

Gold rose to USD4,401.97 an ounce Wednesday, from USD4,376.20 late Tuesday. A barrel of Brent rose to USD89.72 from USD88.22.

The US has "total control" over the Strait of Hormuz, US President Donald Trump said on Tuesday.

"We totally control the Strait of Hormuz. We have control over it; nobody else, only us," he told reporters.

He went on to say he did not trust Iran.

"I'm the last person to trust Iran. They've lied to me constantly. We have total control over the Hormuz Strait right now. They don't have control."

The dispute over transit rights in the strait, a key international route for oil, gas and fertilizer, is considered one of the main triggers for the recent escalation in the military conflict between Washington and Tehran.

Brent fell as low as around USD86.60 on Tuesday. Pakistan's defence minister said the US and Iran are "close to some sort of arrangement" over the Strait of Hormuz, Bloomberg reported on Tuesday, sending oil prices lower.

"Things are shaping up in favour of peace," Khawaja Asif told reporters, according to Bloomberg.

Meanwhile, Pakistan's interior minister is visiting Iran to discuss regional security, stability and other developments, the foreign office said on Wednesday.

"He is discussing bilateral relations, security, regional security and stability, and constructive engagement amongst the parties in the region and regional developments," foreign ministry spokesman Tahir Andrabi, whose government has been mediating to end the fighting in the Middle East, told reporters in Islamabad.

What's more, Al Jazeera reported that discussions between Iran and Oman on the future of shipping in the strait are at an advanced stage.

Analysts at Deutsche Bank commented: "However, oil prices then started to pick up from yesterday afternoon, and they've moved steadily higher since then.

"In part, that followed more hawkish Iranian comments reported by Iran's state-run IRIB news. They reported an adviser to Iran's supreme leader saying that 'the Strait of Hormuz will not be reopened until Iran's conditions are met'. And they also cited the recently-appointed secretary of the Supreme National Security Council, who said that a deal between Iran and Oman on control of the strait 'will remain a separate issue from the Strait's closure'."

In Tokyo, the Nikkei 225 rose 0.8% on Wednesday. Financial markets in Tokyo had been closed on Tuesday for a public holiday. In China, the Shanghai Composite was up 0.3%, though the Hang Seng Index shed 0.9%. Sydney's S&P/ASX 200 was down 0.5%.

In London, infrastructure firm Balfour Beatty shot up 11%, the star performer on the FTSE 250. Underlying profit from operations was 42% higher at £153 million in the first half of the year, from £108 million a year earlier, and for the whole of 2026, Balfour Beatty now expects "low double digit percentage" growth. Its previous view was for "high single-digit percentage growth".

Hill & Smith added 1.0% as it also raised guidance. The infrastructure products provider now expects 2026 "underlying operating profit to be modestly ahead of our previous expectations". Its previous view was for an outcome around USD212 million, which would have represented a 6.2% hike from USD199.7 million.

Hill & Smith went into the day with a year-to-date share price stride of 44%, above Balfour's 21% rise.

Shore Capital Markets analyst Tom Fraine commented: "We note the 44% YTD share price increase and the potential for profit taking, despite guidance of 2026 being modestly ahead of consensus, which we believe investors had viewed as being conservative."

Among large-caps, aerospace firm Melrose added 1.0% as Kepler Cheuvreux raised the stock to 'buy'.

Shore cut Tesco to 'hold', sending shares in the grocer 1.9% lower. Tesco's shares came into Wednesday on a four-day losing streak.

On AIM, Bravura surged 10%. The provider of enterprise software for the wealth management and funds industries said pretax profit in the year to June 30 declined 19% to AUD74.9 million, around £39.2 million, from AUD92.9 million, though revenue rose 9.6% to AUD283.6 million from AUD258.7 million.

Bravura announced it has entered into new debt facilities with HSBC worth AUD100 million.

In addition, it is to launch a share buyback of up to AUD50 million.

"The buy back will be funded from existing cash reserves and as required, Bravura's debt financing, referred to above. Bravura will maintain a strong balance sheet following completion of the buy back and the board will continue to assess its capital management strategy," it added.

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