The FTSE 100 was a laggard on Wednesday morning despite a recovery in Asian markets and tentative gains elsewhere in Europe.
The fortunes of the index were not helped by a higher-than-anticipated inflation number which could up the pressure on the Bank of England to increase rates at its next meeting. Retailers and housebuilders were among those to come under pressure.
US futures point to a positive start on Wall Street after strong numbers from SpaceX. The next test of market sentiment will come tonight with earnings from Meta and Tesla.
The revelation that Anthropic chalked up an $80 billion loss in the first half of this year may magnify concerns about the sustainability of AI spending and complicate the picture for the company’s planned stock market listing.
SpaceX / Tesla
When SpaceX joined the stock market there was a lot of talk of an eventual Musk Corp to combine all of Elon Musk’s various ventures under one roof. The latest developments show this chatter was more than hot air.
Having previously rolled the social media platform and AI lab xAI into SpaceX, folding in Tesla was the next logical step. Tesla’s investment case had arguably already moved beyond the simple manufacture of electric vehicles to its grander ambitions in automation and AI.
Plus, Tesla and SpaceX are already collaborating in several areas, meaning a merger will just make existing ties official rather than representing a dramatic shift for either company.
Attitudes towards any tie-up may chime with whether you were excited about the Roadster flying car project on which both companies worked or were sceptical about it clearing regulatory and safety hurdles and the ambitious timelines outlined.
The vibes around a combination will have been improved by SpaceX’s latest quarterly numbers which helped the shares gain altitude after the market close on Wall Street.
Revenue and earnings both handily beat expectations as the company swung into the black. The market is more willing to countenance spiralling AI spend if they can see it is delivering tangible returns.
Much of this strong performance was driven by renting out the company’s excess computing capacity to rivals. The flipside being the implication that SpaceX’s own AI efforts are struggling to gain traction.
The Starlink satellite business enjoyed solid growth, although it is currently embroiled in some controversy over its positioning around the conflict in Ukraine.
North Sea Oil & Gas Companies
While it is attracting opprobrium from environmental campaigners and some politicians, the green light for the Jackdaw North Sea gas field had shareholders in North Sea oil and gas companies celebrating.
For Shell, which is developing the Jackdaw field, the decision is an obvious win, but it represents relatively small beer in the context of the group’s global operations.
However, suggestions of an improved regulatory backdrop for the industry in the UK has helped give a lift to smaller names with projects in the North Sea like Ithaca Energy, Serica Energy and Jersey Oil & Gas.
Halfords
A first-half trading update suggesting a weaker second half is in store has helped put the brakes on Halfords’ recent share price recovery.
Increased spending on necessary tech updates and marketing campaigns over the winter are expected to weigh on profit in the second six months of the financial year.
This was a cue for some profit taking for one of the FTSE 250’s best performers in 2026. Today’s announcement is unlikely to puncture enthusiasm around CEO Henry Birch’s turnaround plan in the longer term.
The strategy of steering the business towards auto parts and repairs is helping to make revenue and cash flow more predictable and on the cycle retail side a focus on higher-margin e-bike and e-mobility market is providing a boost to profitability.
These factors are reflected in the strong first-half performance and the conservative second-half guidance and incorporation of important investments which should help underpin future growth will be seen as prudent by many shareholders.
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...