FTSE 100 Inches Higher on Earnings Deluge

The FTSE 100 inched up 0.1% on Tuesday, lifted by upbeat earnings from several large-cap companies, including a 15.3% surge in Smith+Nephew shares after it posted higher first-half profits and launched a $500 million buyback. Diageo, BP, and Fresnillo also contributed to gains, while Domino’s Pizza Group slumped 17.6% after cutting its full-year profit outlook. Broader European markets saw modest gains, while US indices ended the day lower amid concerns over tariffs and slowing services activity.

Equities

The FTSE 100 edged up 0.1% on Tuesday, supported by a run of strong corporate results. Diageo led the gains, closing 4.9% higher after reaffirming its 2026 sales outlook and raising its cost-saving target, despite ongoing tariff concerns. 

Smith+Nephew jumped 15.3% after reporting a sharp rise in first-half profits and unveiling a $500 million share buyback. The rally helped lift the broader medical equipment sector to its highest level since November 2021. 

BP rose 2.8% after second-quarter profits beat expectations and the company said it would review assets and reduce costs to improve profitability. Fresnillo added nearly 6% following a positive set of first-half results, while Travis Perkins climbed 5.6% after confirming that full-year profits, including property gains, should meet current market expectations. In contrast, Domino’s Pizza Group slumped 17.6% after cutting its annual profit forecast, sending the stock to its lowest level in over a decade.

In the US, major stock indices fell as investors focused on the impact of tariffs on company earnings. The S&P 500 fell 0.5% on Tuesday, the Nasdaq dropped 0.7%, and the Dow Jones slipped 0.1%. Investors are now watching for upcoming earnings from Disney and McDonald’s, both due to report on Wednesday.

Forex & Commodities

The US dollar rose slightly on Tuesday but stayed close to its weakest levels since Friday, with traders awaiting next week’s US inflation data to gauge the timing and scale of potential interest rate cuts.

Data released on Tuesday showed that the US services sector slowed sharply in July, with the ISM nonmanufacturing PMI slipping to 50.1. Businesses noted that new import taxes were pushing costs higher. Meanwhile, the US trade deficit narrowed in June, with a notable decline in imports of consumer goods and the trade gap with China falling to its lowest level in more than 21 years.

Spot gold gained 0.2% to settle at $3,380 per ounce on Tuesday, supported by growing expectations of lower US interest rates. Silver rose more than 1% to $37.85, its highest level since 30 July. 

Brent crude dropped to $67.64 a barrel on Tuesday and US WTI settled at $65.16, both hitting five-week lows. Sentiment was dampened by concerns about weaker demand, following a soft reading from the US services PMI.