Market snapshot: a quiet ascent and a blistering run
Demand for gold shows little sign of slowing down and the FTSE 100 remains a popular destination for investors. ii's head of markets reports on latest developments here and overseas.
8th October 2025 08:21
by Richard Hunter from interactive investor
US markets stumbled, with some shutdown irritation becoming evident among investors, while a separate report questioned the level of AI margins given the immense amount of capital expenditure currently in play.
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Oracle Corp (NYSE:ORCL) shares were in the line of fire, with shares dipping almost 3% after speculation that the margins on its cloud business were far lighter than those currently being pencilled in by analysts. Such concerns are likely to be exacerbated by any earnings misses during the imminent quarterly reporting season, leaving the tech giants vulnerable after a recent record run.
Declines were limited throughout the sector, however, with further upside for Advanced Micro Devices Inc (NASDAQ:AMD) following its OpenAI tie-up, gains for Dell Technologies Inc Ordinary Shares - Class C (NYSE:DELL) on upbeat outlook comments and a spike for International Business Machines Corp (NYSE:IBM) after the announcement of its own AI partnership with Anthropic.
Elsewhere, Tesla Inc (NASDAQ:TSLA) fell by more than 3% after releasing details of cheaper versions of two of its electric vehicles (EVs), although the shares remain 14% higher so far this year and have risen by 78% over the last 12 months.
More broadly, another failure of politicians to pass a House bill to maintain funding weighed on sentiment. While shutdowns do not traditionally upset markets, the fact remains that the longer they go on, the more damage they cause on the economy, not least on an already brittle labour market.
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In the absence of the non-farm payrolls number on Friday, investors will turn to the release of the latest Federal Reserve minutes later today. An interest rate cut this month is almost fully priced in, but any voices of dissent could move the dial and unsettle investors.
Certainly, broader political concerns, a weaker dollar, punchy valuations and sticky inflation have continued the drive into haven assets, with the gold price sailing past $4,000 per ounce for the first time, taking its gains this year alone to 52% as investors hedge against any or all of those concerns coming to pass.
In the meantime, markets Stateside enter the quarterly reporting season in good shape despite yesterday’s pause for breath, with healthy gains in the year to date of 9.5% for the Dow Jones, 14,2% for the S&P500 and 18% for the Nasdaq.
The FTSE100 may not be grabbing the headlines, but it nonetheless continues its quiet ascent.
Marginal gains at the open protected a measured momentum which has seen the premier index rise by 16.3% so far this year, setting record highs along the way. The rise could well have further to go, especially in light of its heavily discounted valuation in comparison to many of its global peers. For example, the FTSE100 currently trades on a forward price/earnings (PE) ratio of 14, which compares to 24 for the benchmark S&P500 index in the US. While some of this considerable difference can be explained by the frothy valuations which accompany the technology sector in the US, the gap is nonetheless closing.
In turn, this implies that the current attraction of the UK as an investment destination - and the FTSE100 in particular – continues to look compelling. The dividend gap, whereby the S&P500 currently yields 1.1% and the FTSE100 3.2%, is an additional bonus in terms of overall returns.
Market gains at the open were unsurprisingly led by Fresnillo (LSE:FRES) and Endeavour Mining (LSE:EDV) as the gold price continues its blistering run, taking gains so far this year for the two stocks to 266% and 118% respectively.
Banks recouped some of the losses arising from most recent speculation of a windfall tax announcement at the Budget as the government attempts to keep its finger in the financial dyke. Even so, the main players have each had a stellar run this year on higher shareholder returns, robust balance sheets and contained customer impairments, with Lloyds Banking Group (LSE:LLOY), Barclays (LSE:BARC) and NatWest Group (LSE:NWG) enjoying gains of 54%, 43% and 35% respectively.
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