Morning Markets Update: Wall Street Records & UK GDP Data

​​​Wall Street celebrates record highs amid Fed optimism

​Wall Street's main indices closed at fresh record highs overnight, driven by strong performances from Tesla and Micron. The rally came as investors positioned for potential Federal Reserve (Fed) rate cuts following mixed US economic data.

​Tesla surged 6% while Micron jumped 7.5% after receiving a Citigroup upgrade. The semiconductor index reached a new peak, underlining the sector's continued appeal among growth-focused investors.

​Futures markets are now pricing a 100% probability of a Fed rate cut next week. There's also a small but growing expectation of a deeper 50 basis point reduction rather than the standard 25bp move.

​The corporate sector saw dramatic moves, with Warner Bros Discovery surging 29% on takeover speculation. Centene also gained 9% after reaffirming its guidance, demonstrating earnings resilience across different sectors.

​UK economy shows mixed signals in July data

​The UK economy delivered a lacklustre performance in July, with gross domestic product (GDP) flatlining on a monthly basis exactly in line with economist expectations. The three-month growth rate slowed to 0.2%, highlighting ongoing economic challenges.

​Industrial production suffered a sharp 0.9% decline, marking a significant reversal from June's 0.7% growth. Manufacturing output fell across the board, with computer and electronics production dropping 7% after surging 8.8% the previous month.

​Services provided the main support for economic activity, with transportation, storage and healthcare sectors performing well. Construction output managed a modest 0.2% gain, driven by private housing repair and maintenance work.

​The trading platform showed mixed reactions to the data, with sterling extending losses slightly to trade 0.2% lower against the US dollar at $1.35.

​FTSE 100 tests new highs despite economic headwinds

​The FTSE 100 opened 0.2% higher, testing fresh record territory despite the disappointing economic data. Mining giants Rio Tinto, Glencore and Anglo American provided key support to the index.

​Gold miners delivered spectacular gains, with Hochschild up 5% and Fresnillo advancing more than 4%. The precious metal sector has been this year's standout performer, with the FTSE 350 Precious Metals and Mining Index soaring 141% year-to-date.

​However, not all sectors celebrated. Ocado shares plunged 11% after US partner Kroger expressed caution about automated warehouse facilities. This highlighted ongoing challenges in the technology sector's growth story.

​SSP Group bucked the travel retail trend, rising 4% following a Berenberg upgrade. The analyst highlighted strong US travel growth prospects, particularly benefiting food concession operators over traditional retailers.

​Asian markets ride Wall Street momentum

​Asian markets followed Wall Street's lead, with the Nikkei 225, Kospi and Taiwan indices all hitting fresh records. The broad-based rally reflected growing confidence in Federal Reserve (Fed) policy easing and its positive implications for risk assets.

​The momentum underscores how interconnected global markets have become. When US technology stocks rally strongly, the ripple effects quickly spread across Asian markets, particularly in semiconductor and technology-heavy indices.

​Regional central banks are closely watching Fed policy signals. Any dovish shift from the Fed typically provides more room for Asian central banks to maintain accommodative policies without currency pressure concerns.

​This synchronised global rally demonstrates the importance of US monetary policy in driving international market sentiment. Traders are positioning for potential policy divergence as different regions face varying economic conditions.