24th Sep 2025 06:59
(Alliance News) - London's FTSE 100 is set to open lower on Wednesday, as investors digest a cautious tone from the US Federal Reserve head on Tuesday and heightened geopolitical tensions continue to boost commodities prices.
IG says futures indicate the FTSE 100 to open down 18.9 points, 0.2%, at 9,204.42 on Wednesday. The index of London large-caps closed down just 3.36 points at 9,223.32 on Tuesday.
Sterling was quoted at USD1.3508 early Wednesday, broadly flat against USD1.3509 at the London equities close on Tuesday.
The euro traded at USD1.1797 early Wednesday, slightly higher than USD1.1792 late Tuesday. Against the yen, the dollar was quoted at JPY147.90 versus JPY147.87.
Gold was quoted at USD3,776.05 an ounce early Wednesday, down from USD3,778.27 on Tuesday. Brent oil was trading at USD67.78 a barrel early Wednesday, lower than USD67.98 late Tuesday.
"In commodities, gold extended gains to fresh record highs, with USD3,800 per ounce now the next psychological target. Geopolitical tensions, a softer dollar and strong momentum continue to support demand despite overbought conditions. Meanwhile, US crude rebounded on heightened geopolitical risks and another draw in US weekly crude inventories. Still, solid resistance is seen near the USD65 [per barrel] level and the short-term outlook remains rangebound within the USD62/65pb range," said Swissquote analyst Ipek Ozkardeskaya.
In the US on Tuesday, Wall Street ended lower, with the Dow Jones Industrial Average falling 0.2%, the S&P 500 shedding 0.6% and the Nasdaq Composite losing 1.0%.
Federal Reserve Chair Powell said on Tuesday the Fed's balance of its dual mandate has shifted, with US tariffs likely to result in a one-time price adjustment and downside risk to employment having increased.
"The pass through (of tariffs) to consumers has been later and less than we expected," Powell told the Greater Providence Chamber of Commerce in Warwick, Rhode Island.
The Fed chair said the base case is now for a one time price increase from tariffs that will extend "well into next year." That increase will then subside by the end of 2026 as inflation moderates closer to the Fed's 2% goal.
"The S&P 500 is entering a sensitive yet opportunity-rich phase as monetary policy and the corporate earnings trajectory are gradually aligning in a more favourable direction compared to the first half of the year. The Fed's decision to cut interest rates by 25 basis points at its September 18 meeting marked an important turning point: the tightening cycle has shown signs of shifting toward cautious easing," commented XS.com analyst Linh Tran.
"However, Chair Powell’s "data-dependent" message discouraged markets from betting on an aggressive cutting path. Still, the fact that the peak interest rate level has likely passed is sufficient to lower funding costs, ease financial conditions, and provide support to risk assets, including the S&P 500."
In Asia on Wednesday, the Nikkei 225 index in Tokyo gained 0.1%. In China, the Shanghai Composite rose 0.7%, while the Hang Seng index in Hong Kong advanced 1.2%. The S&P/ASX 200 in Sydney was 1.0% lower.
In Wednesday's corporate calendar, half year results from sports clothing and footwear retailer JD Sports Fashion.
In the economic calendar on Wednesday, US new home sales figures.
By Emily Parsons, Alliance News reporter
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