The FTSE 100 surrendered early gains to close lower on Monday, with investor optimism over a weekend EU-US trade deal quickly giving way to caution ahead of a week packed with data, earnings and central bank meetings.
The FTSE 100 closed down 0.4% at 9,081.44. The FTSE 250 dropped 0.8% to 21,951.80, while the AIM All-Share fell 0.5% to 773.02.
European peers followed suit, with the CAC 40 in Paris down 0.4% and the DAX 40 in Frankfurt losing 1.0%. In New York, the Dow Jones slipped 0.1%, the S&P 500 was flat, and the Nasdaq inched up 0.1%.
Markets had opened higher after the US and EU agreed a deal that imposes a uniform 15% tariff on most European imports, avoiding a broader trade war. The EU also committed to hundreds of billions of dollars in US energy and weapons purchases. But traders soon turned wary ahead of Wednesday’s US Federal Reserve interest rate decision.
The Fed is expected to hold rates at 4.25%–4.50%, though political pressure for cuts is intensifying. Governors Christopher Waller and Michelle Bowman could dissent in favour of a cut, with some on the committee reportedly keen to “take out insurance” with early easing. Citi expects Chair Jerome Powell to leave the door open for rate cuts later in the year, keeping September in play.
Markets are also bracing for earnings from Meta, Microsoft, Amazon and Apple this week, along with US GDP data on Thursday and nonfarm payrolls on Friday.
In London, STV plunged 26% after warning full-year revenue and operating profit will fall materially short of expectations, citing weak conditions in both advertising and commissioning.
Ocean Wilsons sank 14% as it confirmed plans to merge with Hansa Investment, delisting its own shares from London and Bermuda. The £900 million combined entity will operate as a closed-ended investment fund under the Hansa name.
FirstGroup rose 1.0% after acquiring Leeds-based Tetley’s Motor Services. The operator will add 55 vehicles to its First Bus fleet. Tetley’s posted £5.3 million in revenue and £1.4 million in EBITDA for the year to March.
Drax added 1.6% after a rating upgrade from Citi, which cited improved prospects for buybacks. Quilter rose 0.3% after Deutsche Bank lifted the stock to ‘hold’.