Oil down, markets up – these are welcome movements for investors after three months of uncertainty around the Iran war.
Brent crude fell 1.1% to $93.90 after Israel halted strikes on Lebanon, raising hopes that a peace deal is still plausible. The further the oil price retreats from the $100 per barrel level, the greater investors’ risk appetite. This explains why miners and consumer cyclical stocks led the charge on the FTSE 100. Defensive-style sectors including healthcare and utilities didn’t fare as well as there was classic portfolio rotation.
Entain extended yesterday’s rally as investors speculated it could come up trumps from Barry Diller’s People Inc trying to buy MGM Resorts. Entain has a joint venture with MGM and investors are wondering if People Inc might want to buy out the UK partner’s share in BetMGM.
Anthropic / Alphabet
Market buzz around AI shows little sign of abating as owner of the Claude chatbot Anthropic unveiled its IPO plans and Alphabet revealed an $80 billion fundraise to support investment in this area.
In announcing its plans to list, Anthropic has beaten OpenAI to the starting line – with the company behind ChatGPT also expected to join the stock market later this year.
Anthropic has already had quite the market impact in 2026 by releasing new AI tools which created fears around disruption for data and software businesses. The so-called ‘SaaSpocolypse’ wiped billions off corporate valuations around the world earlier this year.
Unlike several of its peers, Anthropic has pursued an ‘enterprise-first’ business model of focusing on large corporate clients which has delivered greater revenue visibility than more consumer-centred approaches elsewhere. Nonetheless, there will still be considerable scrutiny on its finances when it publishes its prospectus given the huge cash outflows involved in securing the data centres required to power its advanced AI.
With the last funding round implying a valuation of $965 billion as a private company, there will be every expectation that Anthropic can become the latest name to get behind the rope in the exclusive $1 trillion club.
Google parent Alphabet, along with the likes of Nvidia and Amazon, has a significant stake in Anthropic. However, despite any windfall it might enjoy when Anthropic lists, Alphabet remains hungry for capital as it announces a gigantic equity fundraise.
This speaks to the huge sums involved in keeping pace in the AI arms race. It represents a significant shift from a period of bumper free cash flow to going cap in hand to the markets to help fund its expansion.
It could accelerate the competitive threat facing Nvidia with a scaling up of custom AI chips being a core focus for Alphabet. The backing of Berkshire Hathaway, which is accounting for $10 billion of the new funds raised in the latest big move under its new CEO Greg Abel, offers some validation for Alphabet’s huge programme of investment.
British American Tobacco
People often consider tobacco and vaping companies to be ‘sleep at night’ investments, offering no drama and delivering slow and steady returns. British American Tobacco’s latest update could cause a few nightmares as a chunk of its business isn’t as good as expected.
It is guiding for full-year results to be at the lower end of its medium-term guidance ranges, weighed down by expectations for cigarette volumes to decline at a faster rate than previously thought.
So-called ‘new category’ product demand, which includes vaping and heated tobacco products, is picking up. That should be good news to investors, yet it appears the market had expected the tobacco cash cow to remain stronger for longer.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
