Investors cautious as FTSE trends sideways ahead of Fed speech

The UK’s leading share index opened just 10 points higher at 7,420, with the more domestically-focused FTSE 250 index down 25 points at 17,737. Trading was muted across the board as investors held off on big bets ahead of Powell’s remarks.

In the FTSE 100, retailer Marks & Spencer was a standout gainer, surging nearly 10% after reporting improved interim results. The company said total revenues rose 11% to £6.13 billion in the six months to September, while pre-tax profit jumped 56% to £325.6 million.

M&S saw growth in both its food and clothing divisions, noting “resilient consumer demand” and market share gains. The company also said it has seen positive early signs for Christmas trading, sending its shares sharply higher.

Among FTSE 250 stocks, broadcaster ITV fell over 6% after posting a drop in advertising revenue for the year so far. Total revenues edged up just 0.9% to £2.98 billion in the nine months to September, weighed down by a 7% decline in ad revenues in its media division.

ITV said the advertising market remains challenging and it expects revenues from this key income stream to be down around 8% for the full year versus 2022.

With UK inflation still hovering near 40-year highs, investors are focused on Powell’s speech later today for any fresh clues about how much further the Fed may need to raise interest rates.

Markets expect the Fed to slow its pace of hikes soon, but tighter policy aimed at taming inflation could also tip major economies into recession next year.

Against this uncertain backdrop, traders remain cautious. Any hawkish signals from Powell later could put pressure on stocks, while a dovish tone may lift markets.

For now, with many unknowns about the economic outlook, the FTSE is drifting sideways as investors await more visibility on the path for inflation and rates.