Yesterday saw a rebound in major indices after a tech-led pullback earlier in the week, driven by solid economic data, strong earnings from companies like AMD, and easing concerns over AI valuations. However, pre-market futures point to a modestly lower open today amid ongoing tariff discussions and mixed earnings expectations. UK equities face uncertainty ahead of the BoE meeting and interest rate decision expected at 12:00. UK inflation remains above target, for example, CPI came in at 3.8% in September, which is lower than expected but still nearly double the BoE’s 2% target. For that reason the BoE is unlikely to cut rates today. The market is more confident that a cut will occur sometime in 2026 (for example, rates moving down to 3.5%–3.75%) rather than this year.
valuation concerns in the tech sector represent one of the most pressing threats to broader market stability right now. Today we learn that OpenAI is asking the US government to provide loan guarantees for its massive infrastructure expansion, this is the kind of headline that would prompt people to sell tech stocks.