Daily market update: Markets pull back, Nvidia, EasyJet, BT Mitchells & Butlers

Markets pulled back across Europe as the waiting game to end the Iran war rumbled on.

A lacklustre response to Nvidia’s results goes to show investor euphoria around AI is fading, and other issues are weighing on their minds such as inflation and interest rates.

Utilities were the only bright spot on the FTSE 100, suggesting investors were in a risk-off mood. It didn’t help that some of the UK’s biggest quoted names traded without the right to their next dividend, explaining the downward price movements in Shell and Imperial Brands.

Mitchells & Butlers’ shares were dealt a nasty blow after a slowdown in sales, blamed on tough year-on-year comparative figures to beat, a more uncertain economic backdrop, and transport strikes in London. The news took the shares down to lows not seen since April 2025.

Nvidia

Investors want the world from Nvidia. Despite the company once again beating consensus quarterly sales and earnings estimates, the shares fell in pre-market trading on worries around the sustainability of its rapid growth.

The chip giant is starting to sound like a broken record, playing the same message over and over again. It effectively says AI demand is strong, lots of customers are queuing up for its chips, and there is still much more to go for. The market’s attention is now focused on how long Nvidia can sustain this momentum.

Even the fastest or strongest athletes run out of steam at some point, and investors are starting to worry that Nvidia cannot keep up its current pace. That isn’t to say Nvidia will collapse to the floor – it’s more that it might transition from a 100-metre sprint to a marathon pace. Growing competition is a key factor weighing on investors’ minds, with Nvidia no longer in a one-horse race.

EasyJet

EasyJet is stuck in a holding pattern of higher costs and limited earnings visibility as the Middle East conflict weighs on the airline and holiday industries. Fortunately for EasyJet, people are still taking flights – they’re just booking them at the last minute. That’s better than not flying at all.

The summer will be a testing time for EasyJet as it tries to ensure a smooth operation during its peak season. Air traffic control strikes are normally to blame for any disruption, but fuel constraints could be added into the mix.

There is also the big unknown as to whether we’re facing another cost-of-living crisis if inflationary pressures intensify amid a high oil price. Many people value their week in the sun higher than most other treats, and so it’s possible that cash-strapped consumers will make cutbacks elsewhere to guarantee their summer holiday. EasyJet will be praying that dynamic continues to be in motion.

EasyJet is ploughing ahead with its growth plans despite this uncertain backdrop. That includes improving the distribution of its packaged holidays through agreements with high street travel agents, launching flight and hotel deals, offering a loyalty scheme, and switching to more efficient aircraft. All these moves make perfect sense as EasyJet continues to build on what is already a rock-solid name in the travel and leisure space. There is an incredible amount of trust in the brand and EasyJet is capitalising on that position by doing more to help people get from A to B swiftly, cheaply and in an enjoyable way.

BT

Telecoms titan BT may have raised its annual dividend and lifted the medium-term outlook for the payout, but there was still a sense the market was underwhelmed by its full-year results.

BT’s recovery is built on moving past the peak period of capital expenditure on infrastructure which should then allow free cash flow generation to advance substantially.

It has made progress on reducing costs in the past financial year and is intent on rewarding shareholders for their patience while the turnaround plan plays out. However, the company is finding it difficult to dial up revenue growth. Revenues fell modestly in the year to 31 March and are expected to decline in the current financial year too.

Broadband customers are still being lost in its Openreach business and while its consumer retail division returned to growth, average revenue per user remained under some pressure thanks to strong competition in this market.