13th Oct 2026 06:58
(Alliance News) - Stocks in London are set to open higher on Tuesday, shaking off pressure on tech shares in New York and Asia, as focus heads to the US for the start of the banking earnings season this afternoon.
Citigroup, Goldman Sachs, JPMorgan and Wells Fargo light the blue touch paper on Tuesday, before Bank of America and Morgan Stanley follow on Wednesday.
IG says futures indicate the FTSE 100 to open 21.1 points higher, 0.2%, at 10,677.38 on Tuesday. The index of London large-caps ended up 104.23 points, 1.0%, at 10,656.28 on Monday.
The yield on the 10-year US Treasury eased to 5.20% early Tuesday, from 5.24% late Friday evening. The 30-year yield narrowed to 5.56%, from 5.60%. The US observed Columbus Day on Monday. The Securities Industry & Financial Markets Association in the US recommended a Treasury market closure on Monday as a result. Equities traded as normal, however.
The Dow Jones Industrial Average added 0.4%, but the S&P 500 lost 0.1% and the Nasdaq Composite fell 0.4%.
SPI Asset Management analyst Stephen Innes commented: "The Dow managed to stay in the green, the Nasdaq took the heavier hit, and chips were where the selling concentrated. That rotation into value was not particularly mysterious. Higher oil, sticky inflation risk and the possibility that rates stay elevated all favour the parts of the market that are less dependent on long-duration growth assumptions, while the AI complex is increasingly being asked to justify not just the size of the opportunity but the price investors are already paying for it. Memory was the clearest pressure point."
Major banks kick off the third quarter earnings season stateside.
"Banks, which will start reporting earnings this week, will be an important read on the consumer and their results will also give an important update on the health of Main Street and the broader US economy," XTB analyst Kathleen Brooks commented.
"As we head into this earnings season, the bar is higher for the US than for Europe, and it is hard to see how the rally in stocks can continue if earnings do not shine."
In Tokyo, the Nikkei 225 was down 1.9% in late trade, after a public holiday on Monday. In China, the Shanghai Composite was up 0.3%, while the Hang Seng Index was marginally lower. Sydney's S&P/ASX 200 was slightly higher.
The pound rose to USD1.3221 on Tuesday from USD1.3211 at the time of the London equities close on Monday. Against the euro it edged down marginally to EUR1.1827 from EUR1.1829.
The common currency bought USD1.1173, up from USD1.1169. Against the yen, the buck fell to JPY158.32 from JPY158.74.
The International Monetary Fund on Tuesday forecast global growth in 2026 would slow less than previously expected because of advanced economies' "resilience" in the face of war-fuelled energy prices, but warned low-income countries remained vulnerable to the supply shock.
The IMF raised its 2026 global growth forecast by 0.1 percentage points to 3.1%, compared with 3.5% growth in 2025.
UK households are set to face a sharper rise in inflation than previously forecast as the conflict in the Middle East propels food and energy costs higher, according to the IMF.
Consumer prices are set to have increased by 3.3% in 2026, up from a previous prediction of 3.2%. This would mark the joint second-highest rate among the G7 group of countries.
Meanwhile, inflation is expected to slow to 2.8% for next year, but this is significantly higher than the 2.4% rate previously forecast by the IMF.
The report, which was released alongside annual meetings from the IMF and World Bank in Bangkok, also pointed to stronger-than-expected UK growth for this year.
UK gross domestic product is set to grow 1.3% this year, having previously predicted a 1% rise.
However, growth for next year is set to slow to 1.2%, down from a previous forecast of 1.3%.
Gold rose to USD4,192.22 an ounce early Tuesday, from USD4,167.84 late Monday afternoon.
A barrel of Brent fell to USD105.34 from USD106.60.
A Houthi official on Monday warned the US it would receive a "painful response" if it entered the war in Yemen, where Saudi Arabia has reportedly requested Washington's help in dealing with the group as it weathers repeated attacks.
Following an attack at the Riyadh airport on Saturday that killed 13 people, US President Donald Trump said he was considering joining Saudi strikes against the group, after having reportedly rebuffed previous requests for help from the kingdom.
"The Houthis are misbehaving very badly. They're misbehaving very badly. No good," Trump said on Monday.
"If the US becomes involved in the aggression against Yemen, we will not deliberate over the decision to respond, rather, there will be a swift and painful response targeting the US and all its interests in the region," Houthi political bureau member Mohammed Al Bukhaiti told AFP in an interview.
Tuesday's local corporate calendar has full-year results from housebuilder Bellway, and trading statements from recruiter Michael Page and convenience food manufacturer Greencore.
The economic calendar has a German inflation reading at 0700 BST.
By Eric Cunha, Alliance News news editor
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