As FTSE opens up a notch while US and UK long-term yields spike, representatives from Hargreaves Lansdown have shared their expert insights.
Derren Nathan, head of equity research, Hargreaves Lansdown, said:
“The FTSE has rebounded slightly this morning after shedding 80 points on Tuesday. Storm clouds are gathering ahead of Rachel Reeve’s second Budget with long-term gilt yields hitting over 5.7%, nearly the highest levels seen in three decades and sterling having its weakest day against the Greenback since liberation day. Bond yields have pulled back a little this morning but it’s likely to be another nervy day ahead with Sterling weakness continuing this morning.
The bond sell off has not just been confined to UK shores, with 30-year US Treasuries reaching nearly 5%, reflecting investor concerns about the ballooning US deficit and fiscal looseness under the Trump regime. So far, tariff revenue’s not been enough to start rebalancing the books.
Futures for the major US indices are showing mixed signals with the broad-based Dow Jones pointing to an opening decline of around 0.3% but the tech-dominated Nasdaq composite up by about the same quantum, supported by strong out of hours trading for Google and YouTube parent Alphabet. This comes after the long-awaited antitrust ruling by the US Department of Justice steered clear of some of the more draconian possibilities such as the forced disposal of the Chrome web browser.
Given the growing economic uncertainty, it’s little surprise Brent Crude oil prices have retreated a little to back below $69 per barrel. But supply concerns and further US sanctions, this time on certain shipping companies following efforts to pass off Iranian oil as Iraqi, continue to keep prices at near four-week highs.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown, said:
“Alphabet just dodged a regulatory bullet – and the market is cheering. Shares surged over 6% after a Judge ruled on remedies in its long-running antitrust case that were far milder than feared. The measures – such as limited data-sharing and curbs on exclusivity deals for Google Search – stop well short of the structural break-up scenarios some had speculated. Crucially, Alphabet retains Chrome and can continue paying Apple to keep Google as the default search engine on iPhones.
This outcome removes a significant legal overhang and signals that the court is willing to pursue pragmatic remedies rather than scorched-earth tactics. That’s a message the rest of Big Tech, many of whom face their own antitrust battles, will be watching closely.
For Alphabet, the timing couldn’t be better. The market had prematurely written the company off in the AI race, a view that looked short-sighted. With cutting-edge models and unmatched distribution, Alphabet is poised to dominate if it can execute well. Questions remain about the future of search, but with this legal cloud lifted, investors can refocus on growth and innovation.
Apple emerged as a quiet winner. Its search deal with Alphabet – worth roughly $20 billion annually – remains intact, and the renegotiation window plus the end of exclusivity clauses could give Apple more leverage and optionality down the line.”
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