Key Takeaways
- The FTSE 100 ended July modestly weaker in the afternoon but is on track to close the month about 3.5% higher, its best performance since February.
- U.S. equities opened higher, with the S&P 500, Nasdaq and Dow all posting gains of roughly 0.4‑0.9%.
- Amazon’s shares jumped 11% pre‑market on strong earnings, while Apple fell 8% due to supply‑chain concerns.
- The Bank of England held rates steady but signaled a possible September hike; the Bank of Japan kept rates unchanged but gave a hawkish tilt that could lead to a rate increase as early as September.
- ExxonMobil reported a 67% jump in Q2 adjusted earnings, benefitting from higher output linked to Iran‑related oil‑supply disruptions, though its stock slipped 2% after missing forecasts.
- HS2 renegotiated two major contracts (EKFB and Align) to improve cost control, aiming to curb the project’s budget that has ballooned to an estimated £87.7‑£102.7 bn.
- International Airlines Group’s pre‑tax profit fell to €995 m as fuel costs rose over €400 m amid Middle‑East price spikes, despite modest revenue growth.
- UK petrol prices hit a yearly high of 160p per litre, with diesel at 179p, reflecting renewed geopolitical tensions in the Gulf.
- Morrisons announced roughly 5,000 job cuts after a widened pre‑tax loss of £926 m, citing debt, competition, a cyber‑attack and inflationary pressures.
- Eurozone headline inflation ticked up to 2.9% (core to 2.5%); analysts anticipate a potential ECB rate hike of 0.25 percentage points in September if energy‑driven price pressures persist.
FTSE 100 month‑end performance
The FTSE 100 finished July slightly weaker in the afternoon, slipping 0.5% after 3 pm BST, but it remained on track to close the month about 3.5% higher at roughly 10,840 points. Earlier in the session the index touched a new intraday record, recovering from a March low below 9,700 points that was triggered by the US‑Israeli strikes on Iran. Despite the late‑day dip, the overall picture for July is markedly more positive than the turmoil seen earlier in the year.
FTSE 100 on track for best month since February
With roughly two hours of trading left, the FTSE 100 had gained about 407 points for July, putting it on course for a gain of nearly 4% and its strongest month since February 2024. The benchmark reached a fresh intraday high of 10,989.45, although it appeared unlikely to breach the 11,000‑point barrier. The index had lost 6.7% in March after the Iran‑related attacks, but has since recouped those losses and surpassed its February peak, signalling a robust rebound.
Wall Street opening gains
U.S. equities opened the day in positive territory, with the S&P 500 up 39.96 points (0.54%) to 7,477.59, the Nasdaq climbing 231.33 points (0.92%) to 25,353.51, and the Dow Jones gaining 225.88 points (0.43%) to 52,433.94. The advances reflected investor relief after a series of corporate earnings releases and a cautious optimism that geopolitical tensions in the Middle East would not derail the broader market rally.
Amazon and Apple pre‑market moves
Amazon’s shares jumped 11% in pre‑market trading after the company posted better‑than‑expected earnings and strong growth in its cloud‑computing division, a move that would add roughly $280 billion to its $2.53 trillion market cap. In contrast, Apple’s stock fell 8% pre‑market as supply‑chain concerns weighed on its forward guidance. Despite Apple’s slide, analysts expect Amazon’s strength to lift the Nasdaq 100 by about 0.9% at the open, with the S&P 500 and Dow poised for modest gains of 0.3% and 0.5% respectively.
Bank of England holds rates, eyes September hike
The Bank of England kept its policy rate unchanged at its latest meeting, but several economists warned that a rise could be on the horizon for September as inflationary pressures persist. The BoE’s stance mirrors a similar tightening bias emerging in other major economies, reflecting concerns that continued geopolitical shocks—particularly the renewed U.S.–Israeli actions against Iran—could keep price pressures elevated longer than anticipated.
Bank of Japan signals possible rate hike
The Bank of Japan left its benchmark rate steady at 1%, as widely expected, but Governor Kazuo Ueda delivered a hawkish message, warning that underlying inflation could soon exceed the 2% target and that future policy debates would focus on upside price risks. The statement nudged the two‑year Japanese government bond yield higher and prompted a sharp yen appreciation in European morning trade, with markets pricing in a potential rate hike as early as September.
ExxonMobil posts strong Q2 earnings amid Iran conflict
ExxonMobil reported adjusted earnings of $14.7 billion for the April‑June quarter, a 67% increase from the first quarter and nearly double the year‑earlier figure, driven by higher output in the Permian Basin and offshore Guyana as companies sought to exploit Iran’s blockade of the Strait of Hormuz. Despite the profit surge, the shares slipped 2% in pre‑market trading after missing analyst forecasts, underscoring that market expectations had outpaced the actual results.
HS2 renegotiates major contracts to curb costs
HS2 announced the renegotiation of two of its largest contracts—with joint ventures EKFB and Align—covering 100 km of the line between London and the West Midlands. The new agreements aim to reset incentives by rewarding efficient delivery and cost control, addressing past waste and mismanagement that had inflated the project’s budget from an original £32.7 billion to a current estimate of £87.7‑£102.7 billion. HS2 chief Mark Wild called the reset an important milestone, while negotiations with the remaining joint ventures BBV and Skanska Costain STRABAG continue.
IAG profits hit by rising fuel costs
International Airlines Group (IAG) saw pre‑tax profits fall to €995 million (£852 million) in the latest quarter, down from €1.5 billion (£1.3 billion) a year earlier, as fuel costs rose by more than €400 million due to Middle‑East price spikes. Although most of IAG’s fuel needs are hedged, the unhedged portion eroded margins. Revenues edged up 1% while passenger numbers remained flat, and the group highlighted ongoing efficiency drives, including AI‑based systems and a net increase in front‑line staff reductions in the head office and a net increase in front‑line personnel despite office headcount cuts.
UK petrol prices hit yearly high
The RAC reported that the average UK petrol price climbed to 160p per litre, the highest level of the year, after increasing more than 9p from a low of 150.59p on 6 July. Diesel averaged 179p per litre, up 14.5p from its early‑July trough but still below the April conflict peak of 191.54p. The price rise reflects wholesale oil movements tied to renewed Iranian tensions, and analysts expect diesel to creep toward 185p unless oil prices fall sharply.
Morrisons announces 5,000 job cuts after large loss
Morrisons revealed a widened pre‑tax loss of £926 million for the year to October 2025, up from £612 million the prior year, despite a 3.2% rise in sales to £15.8 billion. The supermarket blamed the loss on heavy debts, competition, a cyber‑attack on a key IT provider, and inflation‑related cost increases. In response, it announced the elimination of roughly 5,000 jobs, including cuts to its newspaper delivery service, head‑office roles, and Rathbones bakery division, while noting that net debt fell 46% to £3.2 billion after its 2022 private‑equity acquisition.
Eurozone inflation ticks up, ECB may act
Eurozone headline inflation rose from 2.8% to 2.9% in July, with core inflation edging up to 2.5%—slightly above the 2.4% forecast. Economists warned that higher oil prices stemming from renewed U.S.–Israeli actions against Iran could feed further price increases, especially in energy‑driven sectors. Analysts such as ING’s Bert Colijn and Pantheon’s Claus Vistesen expect the European Central Bank to consider a 0.25‑percentage‑point rate hike in September, viewing it as possibly the final tightening before a pause to assess the outlook.