Daily market update: FTSE 100 drifts with oil above $110, Diageo, NatWest, Apple

The FTSE 100 took a step back on Friday on a mix of continuing concern about the situation in the Middle East, profit taking in the utilities sector and weakness among precious metals miners.

The latest US earnings season has been robust, which has helped prevent global markets from suffering big losses despite the impact of the Iran conflict. US futures are pointing to another strong showing when trading resumes on Wall Street later. 

But oil prices remaining above $110 per barrel are a reminder of the stakes for the global economy and the fact that there looks to be no path to the Strait of Hormuz reopening in the near term. 

Diageo will have been toasting King Charles’ visit across the Atlantic after President Trump said he would remove tariffs on whisky following conversations with the Royal couple. 

Pearson was also higher on a resilient set of results and a confident tone sounded by chief executive Omar Abbosh, which suggested the company can benefit rather than being disrupted by AI. 

After the big spike yesterday in United Utilities as it outlined a major spending programme, investors took some money off the table. Focus appears to be switching from the growth potential on offer to the challenges involved in executing on these ambitious plans.

NatWest

A slowing pace of rate cuts is ostensibly good news for UK banks and NatWest chalked up an impressive performance at a headline level in the first three months of 2026.

However, there is a flipside as NatWest has been forced to increase its provisions for bad loans as the economic toll on borrowers from the Iran war and the inflationary pressures it has unleashed is likely to tell over the coming period.

This, combined with net interest income which was just a smidge below expectations and a relatively conservative outlook, saw the share price take a pause for breath.

That doesn’t take away from the strategic progress the company has made. Granted greater freedom by its return to full private ownership, the deals to acquire Sainsbury’s Bank and Metro Bank’s mortgage book seem to have gone to plan. 

The sub acquisition of wealth management outfit Evelyn Partners should help the company achieve its aim of increasing the amount of business it does which isn’t tied to the interest rate cycle – an ambition it shares with its peer Lloyds.

There were no major disappointments in NatWest’s latest results but the exceptionally strong run for the shares in recent years means it is being held to a high standard.  

Apple

Apple is taking a different approach to AI than its hyperscaler peers. It is spending much smaller sums and turning to partnerships instead of trying to take a lead in the artificial intelligence arms race.

Time will tell if this plan pays off but what some have dubbed the ‘Switzerland’ strategy, allowing users of its devices to choose the AI tools they want to use, does mean the cash outflows are significantly lower.

In a world where the market is becoming increasingly fretful about the scale of the spending elsewhere, incoming CEO John Ternus pledging to maintain Apple’s ‘deliberateness and discipline’ is messaging many investors will lap up. It also facilitates increased dividends and the usually hefty allocation to share buybacks.

The decision to sit on the sidelines when it comes to AI makes the performance of its core products and services even more important and in this context the stellar performance of the iPhone 17 is highly significant.

Claims the iPhone is ex-growth have been made multiple times over the last decade or so but the latest model has confounded any sceptics and helped the company outpace expectations at a group level. Lucrative services revenue from what is now a huge installed base of iPhones worldwide is also growing more rapidly than analysts had anticipated.

There are challenges ahead for Ternus, not least managing the supply chain and the increased cost of items like memory chips thanks to the demand associated with data centres.