Must read: copper, gold, FTSE 100, Microsoft, easyJet, Federal Reserve

GLOBAL MARKETS 

European markets have opened mostly higher with the FTSE 100 up over 0.5%. 3i Group Ord (LSE:III) shares have soared to the top of the index, up 13%, set for its biggest daily gain in six years thanks to a strong Q3 performance update. 

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Miners are towards the top of the FTSE 100 today thanks to record highs for copper, gold and silver. Fresnillo (LSE:FRES), Endeavour Mining (LSE:EDV), Antofagasta (LSE:ANTO), Anglo American (LSE:AAL) and Glencore (LSE:GLEN) are all enjoying gains.

US futures are pointing to a higher open as investors assess a mixed bag of tech earnings – Microsoft Corp (NASDAQ:MSFT) fell after hours, while Meta Platforms Inc Class A (NASDAQ:META) and Tesla Inc (NASDAQ:TSLA) staged gains. It comes after the S&P 500 temporarily hit the 7,000 milestone for the first time in yesterday’s session before closing off the highs. Focus turns to Apple Inc (NASDAQ:AAPL)’s results after the bell tonight. 

Oil prices are trading back up at September highs, after a strong uptrend this week, with Brent crude and WTI both gaining around 1.5% today, pricing in the US-Iran uncertainty and fears of military escalation.

MICROSOFT 

Microsoft Corpreported fiscal Q2 2026 earnings per share of $4.14 on revenue of $81.27 billion up 17%, both beating expectations. Despite this, shares fell in after-hours trade, with investors concerned about its heavy spending on AI infrastructure with quarterly capex hitting $37.5 billion ahead of forecasts and up nearly 66% versus last year. There was also slightly slower growth of 39% in cloud computing, in line with consensus but down from 40% in Q1. Nonetheless, in a notable milestone, cloud revenue surpassed $50 billion for the first time. 

Microsoft has been a key winner in the AI arms race thanks to its partnership with OpenAI. However, there is stiff competition from models like Alphabet’s Gemini, Meta’s Llama and Anthropic’s Claude. Plus there are concerns that demand will struggle to keep pace with the colossal levels of spending and increasing dependence on debt. 

Although shares have recovered well from the Liberation Day lows last April, the stock has struggled since November’s market volatility sparked by AI bubble fears, and has shed more than 16% over the last three months.

EASYJET 

easyJet (LSE:EZJ) reported a fiscal Q1 FY26 headline loss before tax of £93 million, worsening from £61 million in the same period last year due to strategic investments at Milan Linate and Rome Fiumicino airports. However, it enjoyed passenger growth of 7% year-on-year, a 2 percentage point rise in its load factor to 90%, and easyJet holidays delivered profit before tax of £50 million with customer growth of 20%, helping to lift shares. 

In terms of guidance, easyJet issued an upbeat assessment of demand at the start of 2026, highlighting record volumes and revenue so far this January, as individuals and families look to lock in their summer bookings early. 

As expected, easyJet struggled with weaker bookings over the quieter winter months. However, start of the year trade so far bodes well for what looks like it could be another busy summer for the airline when school holidays and warm European weather drive a seasonal flurry of demand, despite stiff competition from rival low cost carriers. 

Once again it looks like the holiday arm stole the show – this burgeoning business attracting demand from cost conscious consumers searching for value packages, and provides EasyJet with diversification beyond flights.

Investors are responding positively to easyJet today with shares up around 2.5%. Although the stock has underperformed the wider market over the last year, shares are broadly unchanged year-on-year, failing the reflect the company’s fundamental progress particularly in its flying holiday business.

FEDERAL RESERVE 

As expected, the Federal Reserve voted to keep rates unchanged at 3.5-3.75%, having carried out three 25 basis point cuts in the second half of last year. Dissenters Miran and Waller voted for a cut but were outvoted in favour of a hold. Meanwhile, the Fed issued an upbeat assessment of the US economy, saying it "has been expanding at a solid pace" and Chair Jerome Powell said, "the outlook for economic activity has clearly improved since the last meeting." 

Looking ahead, focus for investors will be who takes over as Fed Chair when Powell’s term ends in May, with BlackRock’s Rick Rieder the current frontrunner. Focus is also on when the Fed might next cut rates, which is likely to come after Powell’s departure sometime in summer with the potential for around 50 basis points of further cuts this year. Beyond that, Fed watchers will be closely watching the outcome of the Trump vs Cook case in the Supreme Court amid concerns over central bank independence. 

The reaction to the Fed’s decision was largely muted across equities and bonds with little that surprised markets.