HL commentary as it happens

Oil tiptoes higher in early trading

Oil prices moved higher in early trading after OPEC+ stuck to a cautious playbook, agreeing to a modest 137,000 barrel per day output hike for November. The move eased fears of a supply surge as the group framed the decision around steady economic signals and healthy fundamentals, while keeping the option to pause or reverse. Gains were capped by worries that Washington’s shutdown could sap growth and energy demand.

Gold reaches fresh high

Gold surged to a fresh all time high this morning as traders braced for a prolonged US shutdown and leaned into expectations of imminent rate cuts. But gold’s rally is telling a different story this time with performance moving in step with other assets like stocks and cryptocurrencies, hinting that growth drivers are rooted more in rate and inflation dynamics than a classic flight to safety.

FTSE flat at open, US futures point higher

The FTSE 100 has opened broadly flat this morning as the UK’s largest index takes a ‘wait and see approach’ to the week ahead.

US futures point higher after the S&P 500 capped Friday with fresh all-time highs in a whipsaw session. Investors are navigating a data drought as the government shutdown drags on, but Fed minutes and policy chatter later this week will be key for rate expectations.

Hopes of further cuts in US, even as sticky inflation looms longer term, combined with optimism for earnings season is keeping momentum alive, with nearly 70% of the largest US companies seeing their profit forecasts raised over the past three months.

Brent crude tests $70 mark

Brent Crude prices have bounced back slightly from their recent slump to around $64.4 per barrel. Rumours that OPEC+ could bring a further half a million barrels per day on stream in November are doing little to calm concerns of oversupply, as US inventories continue to rise. The potential economic fallout of Washington being close for business is also keeping prices down.

Wall Street at new highs as tech stocks shine

A lack of digital-native names listed in London meant yesterday’s session didn’t benefit from the positive sentiment towards the technology sector, which helped US Stocks meet new fresh highs. It was a sea of green for semiconductor stocks on Wall Street, but banks, consumer defensives and real estate valuations were largely in the red.

The good news/bad news conundrum could see further polarisation in the coming months. Weak growth is bad for mature companies in the old economy. The flip side is that expectations of falling interest rates are strengthening. That’s a boon for multinationals as the dollar weakens and a double positive for growth stocks. Their fortunes are tied not just to the economic cycle but also to longer-term megatrends. Falling rates also allows the market to put a higher value on future cash-flows, which, by definition, are expected to accelerate faster for growth companies.

The ongoing US government shutdown means that official employment numbers are on hold, but a report from Challenger, Gray & Christmas revealed that hiring plans were at 16-year lows adding to other recent signs of weakness in the labour market. That, and Donald Trump’s opportunistic efforts to shrink central government spending, are some of the drivers that have seen expectations solidify for two further Fed cuts before 2026.

FTSE rises at the open

The FTSE 100 has opened slightly up this morning and is within touching distance of record highs earlier in the week. The main UK economic signal to watch for on Friday is the Services Purchasing Manufacturers Index (PMI). The Services PMI is expected to have fallen from 54.2 to 51.9 in September, following a gloomy read for manufacturers earlier in the week.

Oil edges higher but still near four-month lows

Oil futures edged up in early trading, with Brent crude moving to $65 per barrel. But prices remain near a four-month low as oversupply fears persist ahead of this weekend’s OPEC+ meeting. US crude inventories rose by 1.8 million barrels, while gasoline demand hit a six-month low, amplifying concerns over near-term demand. Weak Asian factory activity and a US government shutdown further cloud the demand outlook, keeping pressure on prices.

FTSE 100 shows no signs of slowing

London’s blue-chip index is on a prescription for success, extending all-time highs after yesterday’s dose of pharma strength led to the FTSE 100’s best session since July. Pharma stocks were the standout, racing higher on news that Pfizer struck a deal with the US administration to slash drug prices and bypass tariffs. The move provided long-awaited clarity on pricing and lifted hopes that others could follow.

US markets shrug off Washington’s gridlock

The S&P 500 and Nasdaq 100 closed at fresh all-time highs as investors shrugged off Washington gridlock and focused on softer labour data that reinforced expectations for Fed rate cuts. ADP’s surprise decline pushed odds of an October cut near 100%, sending short-dated Treasuries higher while equities drew support from easing policy bets and optimism ahead of earnings season. Markets will likely give the shutdown a week or two of leeway before any cracks start to show.

UK business confidence dips ahead of Budget

The IoD Directors’ Economic Confidence Index has fallen to a record low of -74 in September 2025 from -61 in August. Business leader confidence, a subset of the index, has also fallen. Anna Leach, chief economist at the Institute of Directors shared that expectations for investment had fallen, as had headcount, and that businesses were anticipating higher costs, particularly for labour costs – including taxes, supply chain inflation and higher energy bills. The upcoming Autumn Budget is the driving force for that confidence slump. The IoD members called for pro-business, pro-growth policies from the Chancellor in November, with a focus on a more supportive tax environment.

The Index was published hours after Prime Minister Kier Starmer thanked British businesses for taking on much of the burden of last year’s Budget, recognising the contribution they had made to public finances.

Gold hits another all-time high

Gold has been flashing a warning signal since the beginning of the week, hitting another all-time high yesterday, baking in the shutdown risk before equity markets absorbed the news. Gold is up 45% over the past year, buoyed geopolitical and macroeconomic uncertainty – with investors and global central banks alike stockpiling the asset.

Asian stocks are down along with US

Asian markets have fallen and US equity futures are down as the US goes into shutdown, having failed to secure funding despite crisis talks at the White House earlier this week. NASDAQ and S&P 500 futures are down around 0.4% so far, though investors should expect a bigger impact as the week unwinds should the shutdown continue.

The dollar also fell for the fourth day in a row on the news. Historically shutdowns have been bad for the US dollar, bad for US equities, and bad for bonds too. This is an unwelcome event for a market that has been on a tear since the tariff-induced lows of April, and had been building positive momentum thanks to the AI boom, a Fed rate cut and a near end to tariff uncertainty. President Donald Trump even took credit for the market rally at a recent address to the UN, using it as a proof point for US exceptionalism over other assembled nations.

But should the shutdown remain unresolved it is likely to drive money outside of the US – to markets with more certainty, and less toppy valuations. Bond markets and the outlook for the Fed rate hang in balance as a shutdown could mean that the jobs data due on Friday is unable to be issued, a key data point for investors looking to plot rates’ trajectory.