Lunchtime market roundup: Stocks trim losses, bond yields stay lofty

London's FTSE 100 pared some of its morning decline by afternoon dealings, but the mood remained nervy as government bond yields roared to their highest levels since 2007.

The FTSE 100 index declined 21.39 points, 0.2%, at 10,676.18. The large-cap index was around an intraday high.

The FTSE 250 edged up just 1.44 points at 23,835.92, and the AIM all-share was down just 0.03 of a point at 785.01.

The Cboe UK 100 was down 0.2% at 1,061.57, the Cboe UK 250 was up 0.1% at 20,668.40, and the Cboe small companies was down 0.7% at 18,501.12.

The CAC 40 in Paris and the DAX 40 in Frankfurt were down 0.2%.

"There's no let-up in the volatility rippling through financial markets, with energy prices staying painfully elevated and worries swirling about the knock-on effect for inflation and interest rates," Wealth Club analyst Susannah Streeter commented.

"The bond markets are reflecting concerns that the only way is up, and the worries that the ascent could be a steep one. 10-year gilt yields remain highly elevated at levels not seen since the great financial crisis. It's a fraught picture for US Treasuries, with the 10-year Treasury yield also creeping over the psychologically important 5% mark, flirting with a rate not seen since 2007."

The yield on the US 10-year Treasury widened to 5.01% midday Tuesday, from 4.96% late Monday afternoon. The yield on the US 30-year Treasury stretched to 5.39% from 5.34%.

Both cooled from earlier highs of 5.04% and 5.40%, the loftiest levels since 2007, ahead of Wednesday's Fed decision. A 25 basis point hike is expected.

The UK 10-year gilt spiked to around 5.43% earlier on Tuesday, also its loftiest level since 2007.

Tuesday's UK jobless data did little to shift Bank of England expectations.

The UK unemployment rate remained at 4.9% in the three months to July, where it stood in three month stretch to June. According to consensus cited by FXStreet, it had been expected to rise to 5%.

According to the ONS, payrolled employees in the UK fell by 101,000 on-year in July, declining 19,000 from June.

An early estimate for August showed payrolled employees were 145,000 lower year-on-year and down by 26,000 from July.

Over the three month period, average total earnings growth was 3.9%, cooling from 4.2% in the three months to June, but in line with FXStreet cited consensus. Excluding bonuses, earnings growth was 3.5%, also in line with consensus, and steady from June.

Looking at the private sector alone, a figure closely tracked by the Bank of England, total pay growth abated to 3.2% in the period to July from 3.7% in the stretch to June. Excluding bonuses, private sector wage growth was steady at 2.9%.

On Wednesday, there is a consumer price index report published at 0700, the final piece of the puzzle before a Bank of England decision on Thursday. According to consensus cited by FXStreet, the rate of inflation is expected to have accelerated to 3.1% in August from 2.9% in July.

Analysts at Lloyds commented: "Overall the absence of upside news versus BoE projections keeps its domestic labour market disinflation theme intact (second chart). Unsurprisingly therefore that keeps the focus on external price pressures making tomorrow's August inflation data, and the Fed rate decision, much more significant when it comes to the outlook for UK rates."

Sterling was quoted at USD1.3478 early Tuesday afternoon, down from the USD1.3481 it fetched at the time of the London equities close on Monday. Versus the euro, the pound fell to EUR1.1675 from EUR1.1679. The single currency traded at USD1.1540, flat from USD1.1541 a day prior. Against the yen, the dollar rose to JPY154.80 from JPY154.59.

Gold fell to USD4,276.79 an ounce, from USD4,291.66 late Monday afternoon. Brent fell to USD107.43 a barrel from USD108.30.

Iran's security chief on Tuesday rejected any talks with the US after President Donald Trump said he was open to resuming discussions on the Middle East war.

"Don't get distracted by the US president's mixed signals – from 'no negotiations' to 'we're ready to talk'," the secretary of Iran's Supreme National Security Council, Mohsen Rezaei, posted on X.

"The stakes around oil and the straits have changed. Damage control won't stop what's coming. No talks until Iran's conditions are met. Period!" he added.

In New York, the Dow Jones Industrial Average is called to open 0.4% lower, while the S&P 500 and Nasdaq Composite are set to open 0.3% lower.

AJ Bell analyst Dan Coatsworth commented: "Tech stocks have been beaten up this week on fears that AI is getting too powerful. Although Donald Trump has rejected calls for greater safeguards, the idea that we might need a 'kill switch' for dangerous AI has provided investors with an important reminder that even the hottest of investment themes comes with risks. The debate has prompted a lot of people to reappraise their portfolios."

In London, Wickes shares surged 10%. The home improvement products retailer said it is on course to meet full-year profit expectations after reporting a "significantly" improved trend so far in its third quarter.

Wickes said pretax profit nudged up to £24.6 million in the 26 weeks ended June 27 from £24.2 million the year prior, or to £27.6 million from £27.3 million on an adjusted basis.

Revenue grew 2.1% to £865.3 million from £847.9 million a year ago, in line with guidance provided in July.

Trustpilot slumped 15%. It delivered in-line results but shares fell as a couple of accounting discrepancies took some of the gloss off what it called a "strong" first-half.

The Copenhagen-based consumer review platform said pretax profit rose 32% to USD4.3 million in the half-year to June 30 from USD3.2 million the year prior.

Revenue climbed 23% to USD151.4 million from USD122.8 million, rising 19% at constant currency, and bookings grew 22% to USD171.2 million from USD140.0 million, rising 18% at constant currency. Both figures were in line with company-compiled consensus.

Muddying the waters, Trustpilot said it has taken a USD1 million provision after identifying an exposure where US sales tax had not been applied to certain customer invoices in prior years.

"The prior periods have been restated to reflect management's best estimate of the provision required. This restatement has no impact on underlying current trading, cash flows, adjusted Ebitda or our FY26 financial guidance," the firm stressed.

Packaging firm Mpac fell 6.6%. Its pretax loss in the first half of 2026 narrowed to £500,000 from £8.8 million, though revenue fell 2.3% to £71.0 million from £72.7 million.

"The pipeline of potential future projects continues to grow, and is now larger and building faster than last year. However, global customer decision making remains slow, and the impact of 50% US tariffs recently imposed on goods from Canada is not yet clear. The timing of a broader market recovery remains uncertain," it cautioned.

Copyright 2026 Alliance News Ltd. All Rights Reserved.