The FTSE 100 (^FTSE) touched all-time highs and European indices gained on Tuesday afternoon, while US indices were flashing red, a sign that Wall Street is still suffering the AI jitters that have hammered markets in recent weeks.
After a break for Presidents Day, Wall Street investors are on the lookout for the next potential victim after fresh worries about AI’s ability to upend industries hit stocks in sectors from wealth management to transportation to logistics. The Dow (^DJI) and S&P 500 (^GSPC) have fallen in four of the past five weeks amid that pressure.
The holiday-shortened week also brings a flurry of economic readings delayed by the partial US shutdown. The December print of the Personal Consumption Expenditures index due Friday is in focus after the latest consumer inflation report came in cooler than expected.
Meanwhile in the UK, traders priced in a higher likelihood of an interest rate cut by the Bank of England amid soft jobs data.
The unemployment rate rose to its highest point in five years, hitting 5.2%, while wage growth — a key metric watched by bank rate setters — softened.
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“The Bank of England’s preferred measure of private sector pay growth has fallen to 3.4%, broadly in line with expectations, while broader measures that include bonuses have slowed even more sharply. Wage growth is now much closer to rates consistent with the 2% inflation target than it was a year ago,” said Jake Finney, senior economist at PwC UK.
“With slack building in the labour market and inflation moving in the right direction, the case for further rate cuts is strengthening. A move as early as March cannot be ruled out.”
Last week, data also showed economic growth was just 0.1% in the fourth quarter of 2025, another key data point for Threadneedle Street decision makers.
While the data sent the pound lower, equities markets were in the green.
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London’s premier index was 0.4% higher by the afternoon. Mining stocks were the top fallers, with Antofagasta (ANTO.L) down more than 6% as precious metals prices also fell.
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The more domestically focused FTSE 250 (^FTMC) traded 0.2% higher.
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Over in Germany, the DAX (^GDAXI) was 0.5% up, rebounding from yesterday’s losses. Inflation was confirmed at 2.1% earlier.
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France’s CAC 40 (^FCHI) was 0.3% in the green.
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The pan-European STOXX 600 (^STOXX) rose 0.2%.
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The pound fell 0.7% against the dollar (GBPUSD=X), trading just above the $1.35 mark. The pound sold off sharply after jobs data. Sterling has lost around 1.1% against the greenback in the past five sessions.
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In the US, the tech-heavy Nasdaq Composite (^IXIC) led the way down, losing roughly 0.9%, while the S&P 500 (^GSPC) shed roughly 0.5%. The blue chip-heavy Dow Jones Industrial Average (^DJI), which includes fewer tech names, sold off 0.1%.
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