After what has been a dreadful August for the FTSE 100, London’s leading index made only tepid gains this week despite positive influences from the US tech sector.

Interest rate fears raised their head on Friday and halted the FTSE 100’s recovery in its tracks.

The FTSE 100 closed Friday 5 points higher at 7,338 after finishing last week’s trade at 7,262.

“So much for Nvidia’s knock-out earnings triggering a new global stock market rally. The celebration was short-lived, with Wall Street ending Thursday on a sour note as the Nasdaq closed the day nearly 2% lower. The negative sentiment extended to Asia and parts of Europe on Friday, including a 2% decline in Japan’s Nikkei 225 index,” said Russ Mould, investment director at AJ Bell.

“There is a saying with investments that it can be better to travel than arrive, and one might conclude that Nvidia’s stellar share price run was susceptible to a bout of profit taking and that’s precisely what we got.

“Despite the good fortunes of Nvidia and positive news flow from the company, there is no getting over the fact that investors remain worried that interest rates will stay higher for longer and that casts a downer on the markets as a whole.”

These fears were justified as Federal Reserve Chair Jerome Powell spoke at Jackson Hole on Friday in what was a hawkish delivery that sent global equities lower.

*POWELL: `WE WILL PROCEED CAREFULLY' ON WHETHER TO HIKE AGAIN

*POWELL: FED PREPARED TO RAISE RATES FURTHER IF APPROPRIATE

*POWELL: REAL RATES POSITIVE, WELL ABOVE MOST NEUTRAL ESTIMATES

*POWELL: PERSISTENT ABOVE-TREND GROWTH COULD WARRANT TIGHTENING

— zerohedge (@zerohedge) August 25, 2023

Having traded as high as 7,388 on Friday, the FTSE 100 traded negatively before closely just higher at 7,338. US equities sank but were off their worst levels at the time of writing.

Powell’s comments pave the way for additional US rate hikes over the next couple of months and are at odds with a new narrative that has started to build on when rates will be cut.

Earlier in the year, some had predicted the US would cut rates this year. That school of thought is dead in the water.

Investors will watch intently next week for how equities price higher-for-longer US rates. The UK has its own rate fears and today’s developments could play into those sectors highly exposed to interest rates such as FTSE 100 housebuilders and banks.

LendInvest shares were trading down heavily on Friday after admitting the client data had been accessed by people outside of the company.

UK financial services provider LendInvest recently experienced a data breach that exposed some customer and applicant personal data. The compromised data was limited to a specific test environment, not LendInvest’s core systems.

LendInvest was alerted to the breach on August 24, 2023. The company immediately launched an investigation and took steps to secure the exposed data. The scope of the breach, including the number of impacted individuals and duration of exposure, is still being determined.

According to LendInvest, there is currently no evidence that the exposed personal data has been misused. The company has engaged specialist services to support its ongoing investigation and incident response.

LendInvest states it is contacting the relevant UK regulatory bodies, including the Information Commissioner’s Office and Financial Conduct Authority, regarding the breach. The company also intends to notify all affected individuals appropriately once the investigation yields more details.

While contained, the breach nonetheless highlights the cybersecurity risks inherent for financial services firms like LendInvest that handle sensitive customer data. The company emphasizes its commitment to data security and privacy protections. LendInvest maintains that further details will be provided to affected customers and applicants when available.

LendInvest shares were down 6% at the time of writing.

Premier African Minerals shares were trading down in early trade on Friday after conducting a £4m placing at 0.35p. 

Premier African Minerals shares were down marginally at the time of writing in choppy trade, with bargain hunters stepping in to pick up shares on a discount in the early minutes of Friday’s session, taking the stock positive.

It was almost inevitable the company would raise funds for works at the Zulu project, and the uncertainty lay with how much would be raised and when.

Today’s £4m fundraise will remove some uncertainty, but the amount raised may not be enough to take the company to a stage where cash generation supports operations.

The company said the cash from today’s placing will see them through to lithium production. However, Premier has been forced to offer key contractors newly issued shares for the payment of invoices. This suggests further cash will need to be raised in the future.

In addition, the Premier African Minerals CEO recently lent the company £2m, which he will want to recover.

Premier African Minerals recently renegotiated their offtake agreement with partner Canmax, which sets out a series of production targets, that, if not met, could result in shareholder value-eroding penalties for Premier.

All focus will now be on the development of the plant and whether the first production target can be met later this year.

The FTSE 100 was swept higher on Thursday by a wave of optimism after US chipmaker NVIDIA smashed earnings estimates.

The FTSE 100 was 0.25% higher at the time of writing.

NVIDIA’s earnings almost had a binary outcome for risk assets; miss expectations and risk a sell-off in global equities, beat estimates and send stocks higher, as we have seen today. 

“Better than expected quarterly earnings from Nvidia have significant implications for global markets,” said AJ Bell investment director Russ Mould.

“The chip specialist has been one of ‘The Magnificent Seven’ stocks driving US markets this year, with its shares up 243% since the start of 2023. It’s been one of the market superstars and given investors hope that it is still possible to make good money from equities in an environment where interest rates continue to go up and inflation remains sticky in places.

“Any disappointment in its latest results would have gone down like a lead balloon. It could have hurt investor sentiment and caused contagion elsewhere in the markets. Fortunately, it’s pulled another rabbit out of the hat and given investors everything they wanted and more.

“This appears to have sprinkled some magic dust on the markets and provided new impetus to share prices. The rest of the Magnificent Seven (Alphabet, Amazon, Apple, Meta, Microsoft and Tesla) all saw their shares rise in after-hours trading following Nvidia’s results, and on European markets we’ve seen tech-related stocks such as ASML and Scottish Mortgage move higher.”

The UK Investor Magazine included the Scottish Mortgage Investment Trust in ‘Three Investment Trusts primed to explode higher’ published in July due to the trust’s propensity to rally in a general risk-on move.

The Jackson Hole central bank event will be closely watched going into the weekend for any indication of a change in the trajectory of interest rates. 

The subtleties of central banker’s language can have a profound impact on global equities and the ongoing event in the US could set the tone for trade in the near term.