The FTSE 100 was trading in the red on Tuesday after AI worries hit US stocks overnight, dragging the S&P 500 lower and hitting sentiment in Europe.
The market is still showing signs of concern around the potential for AI disruption, evident in a sell-off in US financials overnight – the latest sector to be hit by targeted selling, which is seemingly moving from sector to sector.
AI-related selling spilled over into the UK session and put AI beneficiary software stocks on the back foot in early trade, although losses here were partially offset by strength in commodities and strong earnings from Croda and ConvaTec.
“While investors looked a bit dazed from a wobbly start to the trading week, market movements on Tuesday would suggest they’re regaining their balance rather than falling over,” says Dan Coatsworth, head of markets at AJ Bell.
“European indices were down a touch amid weakness in financials and pharma, yet the FTSE 100 was propped up by strength in oil and consumer goods sectors. Futures prices imply small gains on Wall Street when trading opens later today, which is important as that could help repair investor sentiment.
“Investors have plenty to worry about, and Nvidia’s results on Wednesday have the potential to make or break the market depending on what it says about AI.”
The FTSE 100 was trading 0.3% lower at the time of writing as strong corporate results limited losses elsewhere.
“That’s offset continued falls in software and data-focussed companies such as Sage, RELX, Experian and the London Stock Exchange Group as herd mentality stokes anxiety around the threats from Artificial Intelligence. Warren Buffett’s mantra of being greedy in times of fear could serve investors well here, as long as they’re prepared to hold for the long-term,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
RELX was down 1.8% while Sage lost 0.7%.
Croda was among the gainers after the specialty ingredients and chemicals group posted a 4.4% increase in sales and a 4.8% rise in adjusted EBITDA. Shares were 2% higher.
ConvaTec was the FTSE 100’s top riser, surging 8%, after increasing its guidance amid an improving pipeline and outlook.
Jonny Mason, Chief Executive Officer of ConvaTec, said: “Convatec performed strongly in 2025, demonstrating further resilient growth. We delivered broad-based organic revenue growth across all categories, supported by new product launches, operating margin expansion, mid-teens growth in adjusted earnings per share and strong cash conversion.”
“Looking ahead, we are increasing our medium-term revenue growth target to 6-8% from 2027. This acceleration follows the successful implementation of our strategy and is underpinned by our rich innovation pipeline.”
Melten Energy & Metals led the charge in the commodities sector, posting gains of 3%. Rio Tinto rose 0.6%.