The FTSE 100 finished marginally down on Tuesday as the US-China tariff pause rally waned despite data showing easing wage pressures in the UK.
The FTSE 100 index ended down just 2.06 points at 8,602.92. The FTSE 250 was up 132.39 points, 0.6%, at 20,759.67, and the AIM All-Share was up 1.79 points, 0.3%, at 731.09.
The Cboe UK 100 was up 0.1% at 858.80 and the Cboe UK 250 was up 0.5% at 18,147.86, while the Cboe Small Companies was down 0.1% at 15,714.63.
In European equities on Tuesday, the CAC 40 in Paris and the DAX 40 in Frankfurt ended up 0.3%.
Stocks in New York were mostly higher. The Dow Jones Industrial Average was down 0.3%, pegged back by a 16% fall in UnitedHealth Group. The firm said Chief Executive Andrew Witty is stepping down for ‘personal reasons’ as it suspended its annual outlook.
In contrast, the S&P 500 index was up 0.9% and the Nasdaq Composite up 1.6%.
Nvidia jumped 5.5% after announcing it will sell over 18,000 of its latest artificial intelligence chips to Saudi Arabian company Humain.
The announcement was made as part of a White House-led trip to the region that includes President Donald Trump and other top CEOs.
US consumer price inflation was cooler than expected last month, numbers on Tuesday showed.
According to the Bureau of Labor Statistics, the pace of yearly consumer price inflation eased to 2.3% in April, from 2.4% in March.
The figure undershot the FXStreet cited consensus. The annual inflation rate had been expected to remain at 2.4%.
It was the coolest rate of inflation since February 2021, the BLS said.
Excluding food and energy, the annual core inflation rate remained at 2.8% in April, as expected.
On a monthly basis, consumer prices advanced 0.2% in April, having fallen 0.1% in March from February. However, loftier growth of 0.3% was expected for April, according to FXStreet.
Core consumer prices rose 0.2% in April from March also, but similarly fell short of a 0.3% forecast.
‘With the price hike threat from tariffs receding thanks to recent agreements and with leading housing indicators pointing to a cooling in shelter costs, there will continue to be scope for Federal Reserve interest rate cuts later in the year,’ analysts at ING said.
Kathleen Brooks at XTB said the data suggests that the US economy was in ‘good shape’ in April, that tariffs are not showing up in the inflation data yet, and that ‘demand for services remains strong, which is why service providers can raise their prices at the rates we have become used to in recent years.’
Back in the UK, figures showed the labour market is slowing and wage pressures easing, which analysts think points to an August interest rate cut by the Bank of England.
Figures from the Office for National Statistics showed the UK jobless rate was 4.5% in the three months to March 2025, in line with FXStreet-cited consensus, and up from 4.4% in the previous three-month period to February.
Vacancies fell by 42,000 to 761,000 during the quarter, which was the 34th consecutive quarterly decline, while the number of payrolled employees fell by 0.2% or 53,000 during the quarter.
Annual growth in regular pay, which excludes bonuses, was 5.6%, edging down from 5.9% in the three months to February, and falling short of an FXStreet-cited consensus for 5.7%.
‘The UK labour market is slowing, not collapsing, and that is translating into a steady fall in wage growth. The Bank of England will want to see this trend continuing for a few more months before it becomes more confident on the wage story,’ ING said.
Bank of America said the ‘faster than expected cooling in wage growth and softening in the labour market should allow further cuts from the BoE.’
The broker expects the BoE to cut interest rates in August, September and November to a terminal rate of 3.5%.
ING said next week’s services inflation number will be much more consequential, given that April’s data is when the big annual price hikes kick in.
‘We think this could come in a little below the bank’s forecasts, which would help cement an August rate cut,’ it said.
The pound was quoted higher at $1.3278 late on Tuesday in London, compared to $1.3206 at the equities close on Monday. The euro stood at $1.1174, higher against $1.1114. Against the yen, the dollar was trading at JP¥147.84, lower compared to JP¥148.18 on Monday.
On the FTSE 100, bookmaker Entain jumped 6.0% as UBS upgraded to ’buy’ from ’neutral’ and raised its share price target to 920 pence from 820p.
British Airways owner IAG continued its recent rally, rising 3.5%, on hopes the cooling in global trade tensions will support travel. Budget airline easyJet was also in favour, climbing 2.3%.
But DCC tumbled 6.5% despite announcing plans to return £800 million to shareholders as profit fell short of expectations.
The Dublin-based sales, marketing, and support services provider said pretax profit fell 18% to £294.9 million in the year to March 31 from £359.2 million a year prior.
Adjusted operating profit from continuing operations increased 3.0% to £703.6 million from £682.8 million a year prior, below £713 million consensus, cited by RBC Capital Markets.
‘Irish conglomerate DCC is among the many companies following the ’shrink to greatness’ strategy, offloading parts of its business to focus on what it does best. This process is still ongoing and it’s a disappointment to see full-year earnings come in below expectations,’ commented AJ Bell analyst Russ Mould.
Last November, DCC announced the sale of DCC Healthcare for an enterprise value of £1.05 billion and on Tuesday, the firm said it plans to return £800 million of proceeds to shareholders.
RS Group topped the risers in the FTSE 250, up 6.3%, after Bank of America put the stock on its ’buy’ list.
‘We think short-cycle weakness is fairly reflected in numbers, and the end of the destocking cycle can support a return to growth in 2H Automation, while the announced savings programs will drive margin expansion,’ Bank of America says in a research note.
Elsewhere, luxury good retailer Burberry was in demand, ahead of results on Wednesday, up 3.7%.
Gold advanced to $3,250.97 an ounce on Tuesday against $3,236.25 on Monday. Brent oil was quoted at $66.21 a barrel, up from $65.21 late Monday.
Wednesday’s economic calendar has an inflation reading from Japan overnight.
The local corporate calendar on Wednesday has half-year results from contract caterer Compass Group and full-year results from luxury goods retailer Burberry.
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