FTSE 100 Live: Stocks Edge Up as Pound Flat, AI Bubble Fears Resurface
Welcome to the City AM FTSE 100 liveblog. Good morning and welcome back to our comprehensive coverage of London's financial markets. The first round of 2026 tech wobbles kicked into action last week, reviving deep-seated fears of an impending AI bubble. This development has sent ripples through equity markets, impacting key players across the globe.
Market Reactions to AI Tool Release
When Anthropic released a new AI tool designed to assist in-house legal teams with triaging agreements and drafting routine responses, the reaction trickled down through law firms and directly into equity markets. In London, Relx fell close to 11 per cent in a single session, wiping billions from its market value. Pearson dropped around four per cent, while London Stock Exchange Group and Experian were down over seven per cent. In Amsterdam, Wolters Kluwer slid almost nine per cent, highlighting the widespread nature of the sell-off.
UBS Downgrades US Tech Sector
UBS has downgraded the US tech sector, citing pervasive uncertainty in the software industry and an expected moderation in infrastructure spend. The bank claimed that Microsoft, Alphabet, Amazon, Meta, and Oracle could all report capital expenditure of $700bn this year. UBS expects capex growth to slow from current levels, which could improve investor perceptions of those doing the spending, but is a potential negative for some companies in the enabling layer.
Earnings Season Outlook
Despite these concerns, earnings season is still expected to show signs of success. According to Bloomberg Intelligence, S&P 500 earnings are anticipated to rise 8.4 per cent in the fourth quarter, marking a tenth consecutive quarter of year-on-year growth. Whilst the FTSE 100 has managed to curb the dramatic losses seen on Wall Street due to its weighting towards commodity-based stocks, investor sentiment across the globe is still being significantly impacted.
Top Headlines from the Weekend
- Sarwar says Starmer welcome on campaign trail despite resignation call
- Greene King weighs job cuts as pub sector braces for cost squeeze
- Carmakers swallow $65bn EV hit as UK bucks slowdown
- Macclesfield FC: FA Cup heroes in talks with 'huge' foreign investors
- UK needs deeper integration with EU, says Starmer
- Brewdog calls time as advisers brought in to assess bidders
- Dubai-based ports boss leaves company after Epstein links revealed
Will 2026 be the year the AI bubble pops? We'll be bringing you the top news and analysis of the morning below, providing insights into how these developments unfold in real-time.
