The FTSE 100 held firm above the 8,500 level on Wednesday as investors prepared for a swathe of US tech earnings in the wake of the emergence of AI model DeepSeek and the Federal Reserve’s interest rate decision later today.

London’s leading index has so far been largely immune to the volatility in major US tech shares after the Chinese AI chatbot flew to the top of App Store downloads. 

However, earnings from Tesla, Microsoft, Meta and Apple over the next couple of days could provide more of a catalyst for global equities as the world’s largest technology companies provide insight into underlying demand from their customers.

It must be noted that the likes of Apple, Meta, and Amazon were largely unscathed by DeepSeek, with the impact felt most by chipmakers such as Nvidia.

“Calm has descended on financial markets after the AI upheaval, which triggered a wave of selling, with investors seeing sharp falls as a buying opportunity,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“Focus is switching to today’s key Fed meeting and the direction of interest rates in the US. Rates being kept on hold is seen as a slam dunk prospect but there will be keen interest in chairman Jerome Powell’s words about the future path ahead, particularly given recent jitters about the prospects of a rate hike this year, which still right now looks unlikely.”

With a raft of companies worth over a trillion dollars set to update the market in the very near term and the Fed’s interest rate decision this evening, traders seem unlikely to take big bets on stocks, and the FTSE 100 ticked gently higher Wednesday.

Recent reports that investment banks are now pencilling in five rate cuts by the Bank of England in 2025 make UK-centric stocks an interesting place to deploy capital. This was again evident in gains for Marks & Spencer, NatWest and British Land on Wednesday.

There has been a relatively sharp reversal in UK interest rate expectations in early 2025 that has all of a sudden made the sell-off in some retailers, banks, and housebuilders look overdone. 

IAG rose and BP fell as traders reacted to a falling oil price on the back of Trump tariff concerns. After a relatively benign first few days in office, Trump is making up for lost ground in disrupting financial markets with his latest suggestions threatening to flood the market with supply.

The Scottish Mortgage Investment Trust rose for a second day as US tech shares recovered. The FTSE 100 investment trust counts SpaceEx, Amazon, and Meta in its top holdings and is the UK’s premier vehicle for gaining exposure to US tech shares with a market cap of nearly £13bn.

Investment platform AJ Bell has announced robust growth in its first quarter ending 31 December 2024, with record assets under administration and continued expansion of its customer base.

The company’s platform business saw total customer numbers rise to 561,000, marking a significant 16% increase over the past year and a 4% growth in the quarter.

Within this, the direct-to-consumer segment demonstrated particularly strong momentum, growing by 20% year-on-year to reach 387,000 customers, while advised customers increased by 8% to 174,000.

AJ Bell is still a long way behind Hargreaves Lansdown’s nearly 2 million active users, but it is catching up.

Assets under administration reached a record £89.5 billion, representing a 17% increase compared to the previous year and a 3% rise in the quarter. This growth was supported by strong inflow performance, with gross inflows reaching £3.6 billion in the quarter, up from £2.7 billion in the same period of 2023. Net inflows also showed improvement, rising to £1.4 billion from £1.3 billion in the previous year.

The company’s investment management division, AJ Bell Investments, demonstrated exceptional growth with assets under management climbing to £7.2 billion, marking a substantial 38% increase over the year and a 6% rise in the quarter. Net inflows for this division remained stable at £0.4 billion, matching the performance of the previous year.

“I am pleased to report a strong start to the financial year as we continued to attract thousands of new customers and increased levels of assets, resulting in a record 561,000 platform customers and £89.5 billion of platform assets under administration,” said Michael Summersgill, Chief Executive Officer at AJ Bell

“AJ Bell Investments continues to perform exceptionally well with quarterly net inflows of £0.4 billion resulting in total AUM surpassing £7 billion for the first time.”

The FTSE 100 rebounded on Tuesday as London’s leading index shrugged off the emergence of DeepSeek in a broad rally led by UK-centric stocks.

A minor rebound in US tech shares on Tuesday went a long way toward lifting sentiment globally as the fallout from sharp declines in stocks such as Nvidia looked to be contained for now.

“Panic on Wall Street sent US tech stocks into a deep slump yesterday and prompted a big debate about whether the AI infrastructure winners will now be dethroned,” said Russ Mould, investment director at AJ Bell.

“Nvidia crashed by nearly 17% which sounds dramatic but only pulled the stock back to October 2024 levels. Someone who has owned Nvidia shares since before summer last year should still be sitting on decent gains, even after yesterday’s pullback.

“It looks like the Wall Street bloodbath was short-lived as Nvidia’s shares are trading 1.4% higher in pre-market trading and futures prices point to small gains for both the Nasdaq and S&P 500 today.”

A slight uptick in sentiment from the US coupled with interest rate traders’ pricing of more UK interest rate cuts in 2025 created the perfect backdrop for a rally in UK-centric stocks.

A softer UK economic outlook is translating into a shift in expectations for the number of interest rate cuts this year, which is feeding through into interest for companies reliant on the UK for income.

Housebuilders were a big beneficiary of hopes of more interest rates, with Barratt Redrow and Persimmon rising over 2%. Howden Joinery rose 3% in sympathy.

JD Sports jumped 4% as bargain hunters picked up the stocks after a sharp fall following a profit warning early in 2025.

A broker upgrade to ‘buy’ for ‘hold’ for Spirax sent shares in the engineering group 4% higher.

Halfords Group has upgraded its profit expectations for FY25, now projecting underlying profit before tax of £32m to £37m, following improved trading performance and strategic progress in recent months.

Halfords shares were 20% higher at the time of writing.

The retailer saw positive like-for-like sales growth in Q3 across both its Retail and Autocentres divisions. The company’s cycling segment performed particularly well, achieving 13.1% like-for-like sales growth in December, driven by strong Christmas sales.

Meanwhile, its Autocentres division showed robust performance in services and maintenance, with consumer garage sales growing by 10.3% in Q3.

Recent colder weather has further boosted performance, with motoring products seeing a 5.5% like-for-like sales increase in January. The company also reported better-than-expected foreign exchange rates for the cost of goods sold in FY25 and lower freight costs than previously anticipated.

Looking ahead to FY26, Halfords, like many retailers, faces an estimated £23m increase in direct labour costs due to minimum wage and national insurance changes announced in the Autumn Budget. The company is developing mitigation strategies to address these challenges, which will be detailed alongside its FY25 results due later this year.

Global financial markets started the trading week contending with a number of fresh concerns, including the first instalment of unpredictable foreign policy under Trump 2.0 after the new president took aim at Colombian goods. Markets were also rattled by a US tech sell-off sparked by developments in China.

Traders were monitoring sharp declines in US futures amid concerns that Chinese AI firm DeepSeek could give US counterparts a run for their money, threatening an upset in the AI-induced rally that has propelled US equities higher.

S&P 500 futures were down over 2% at the time of writing as traders reacted to the strength of DeepSeek’s AI models which appear to have higher levels of efficiency, both in terms of costs and achieving desired results with less complex chips.

“The small Chinese research and engineering firm DeepSeek’s AI Chatbot has proved so popular it jumped into the top spot on US iOS App, usurping Open AI’s ChatGPT,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“DeepSeek threatens to spook big tech and has already sent shivers through Silicon Valley by releasing details about how to build large language models more cheaply using low-cost Chinese chips.”

The culmination of Trump tariff actions, worries about the health of the AI rally, and a rising pound curtailed demand for the UK’s risk assets on Monday.

“Investors are navigating global trade while a slightly stronger pound compared to recent weeks is holding back multinationals due to the effect on their overseas earnings,” Susannah Streeter explained.

Trump’s erratic approach to Colombia and the use of tariffs were felt in UK stocks on Monday as sentiment took a hit.

That said, the UK’s lack of exposure to technology was a blessing, and the declines in the FTSE 100 were far less severe than in US stocks.

London’s leading index slipped 0.25%, led lower by miners and the tech-heavy Scottish Mortgage Investment Trust.

Miners were down heavily after reports BHP would put its plans to acquire Anglo American on hold. Anglo shares sank 5%.

Defensive stock highlighted the risk-off tone to trade with Severn Trent and British American Tobacco gaining 4% and 2%, respectively.