The FTSE 100 closed lower in London as early advances evaporated following another strong US inflation print. The index ended down 31.28 points, or 0.3%, at 10,751.59, having earlier traded as high as 10,868.51.
The FTSE 250 finished 40.31 points higher, up 0.2%, at 24,746.65, while the AIM all-share shed 1.85 points, or 0.2%, to 759.54. In Europe, the CAC 40 in Paris rose 0.6%, and the DAX 40 in Frankfurt climbed 0.3%.
US equity markets were lower around the time of the London equities close on Tuesday. The Dow Jones Industrial Average was down 0.6%, the S&P 500 was 0.7% lower, and the Nasdaq Composite gave back 1.0%.
US Inflation Beats Expectations
Figures from the Bureau of Labour Statistics showed US consumer prices rose more than expected in October, as higher food, housing and energy costs continued to pressure households. The consumer price index rose 0.4% month-on-month on a seasonally adjusted basis, slowing from a 0.6% increase in September but exceeding the FXStreet-cited consensus forecast of 0.3%.
Core inflation, which excludes volatile food and energy prices, remained steady at 0.3% month-on-month, matching September and August increases but coming in above expectations of 0.2%.
Leslie Preston, senior economist at TD Economics, said inflation pressures were fairly broad-based across categories and, “most importantly,” show little sign of cooling. “The source of inflation pressure has shifted from tariffs to higher energy costs and strong demand for tech-related goods due to the AI boom. Where it hasn’t shifted is lower,” Preston added.
Rate Hike Expectations Firm
Barclays analyst Pooja Sriram noted it was the third consecutive upside surprise in core CPI, which “reinforces the message that underlying price pressures remain firm” and “strongly supports” a December Federal Open Market Committee rate hike. Analysts at Morgan Stanley agreed, saying the report increases the likelihood of a more hawkish Fed path. They expect two 25 basis point hikes, in December and March.
Ahead of the figures, US Federal Reserve governor Chris Waller said he would support a rate hike in December and warned that if inflation continued to accelerate he would support a half-percentage-point increase to protect the central bank’s credibility.
The data lifted the dollar and pushed US Treasury yields higher. The pound was quoted at 1.3323 dollars late Tuesday afternoon, down from 1.3415 dollars on Monday. Against the euro, sterling declined to 1.1949 euros from 1.1974 euros. The euro was lower at 1.1150 dollars from 1.1203 dollars, while the dollar rose to 158.79 yen from 158.05 yen against the yen.
The yield on the US 10-year Treasury was quoted at 5.00% late Tuesday afternoon, stretched from 4.88% on Monday. The yield on the US 30-year Treasury was at 5.36%, widened from 5.27%.
Anthropic IPO in Focus
Investors will be hoping the upcoming initial public offering from Anthropic will give the market a lift. On Tuesday, Anthropic said it could raise between 84.6 billion dollars and 93.7 billion dollars through the IPO, which could value the business at around one trillion dollars.
In a filing, the San Francisco-based Claude chatbot maker said it plans to sell 801.4 million shares, with a further 23.6 million shares being sold by other shareholders. Should underwriters sell more than 825 million shares of Class A common stock, they have the option to purchase up to an additional 123.8 million shares from Anthropic. The company expects the IPO price per share to be between 70.00 dollars and 78.00 dollars, potentially valuing Anthropic at 1.02 trillion dollars.
Oil and Gold Pressured
London equities had earlier pushed higher, reflecting a further fall in the oil price as hopes grew of a peaceful resolution to the US-Iran war. US secretary of state Marco Rubio said he saw no need to resume major combat operations against Iran because economic sanctions and other restrictions were working effectively. Brent oil was trading at 91.74 dollars a barrel on Tuesday, lower than 94.27 dollars late Monday, sending oil majors BP and Shell down 0.8% and 2.1% respectively.
The strong dollar pressured gold, with miners Fresnillo and Endeavour Mining falling 4.7% and 4.3%. Gold was quoted at 4,025.90 dollars an ounce, down from 4,116.80 dollars on Monday.
Corporate Movers
Marks & Spencer was a prominent gainer, up 4.1%, as it outlined the next phase of its transformation strategy. The retailer aims to double food sales and achieve an operating margin of around 5% in the division. It also plans to double its financial 2027 dividend to 8.4 pence per share from 4.2 pence.
On the FTSE 250, Funding Circle leapt 13% after upgrading its full-year expectations, citing resilient demand from small and medium-sized enterprises. The company expects 2026 revenue of at least £275 million, up 7.8% from previous guidance of £255 million.
Among smaller companies, EDX Medical Group jumped 19% after launching what it described as the first breast cancer prognostic test in the UK capable of assessing short-term and long-term recurrence risks, extending up to 15 years. The Cambridge-based diagnostics company entered an agreement with US-based Caris Life Sciences to supply its Caris MI Clarity test in the UK.
The biggest risers on the FTSE 100 were Marks & Spencer, Investec, Computacenter, Lion Finance Group and British American Tobacco. The biggest fallers were Fresnillo, Endeavour Mining, Antofagasta, Glencore and Shell.
Wednesday’s global economic events calendar includes inflation figures in Germany and Ireland, with European Central Bank president Christine Lagarde due to give a speech. The local corporate calendar has trading statements from broadcaster ITV, engineering company Spirax and housebuilder Taylor Wimpey.
