In an eventful week for global markets, the FTSE (^FTSE) once again hit a record high after a sharp sell-off of software stocks, which boosted other sectors.
The sell-off began after AI upstart Anthropic announced that its new tool could automate several types of legal work. This proved unsettling news for companies that sell data analytics and decision-making tools to legal firms, prompting a swift reaction from midweek markets.
Meanwhile, silver prices plunged in a further sign that the precious metal was losing its lustre as a safe-haven asset for the time being.
Speaking of plunges, bitcoin’s price dropped to its lowest rate since 2024 as investors pulled out of the cryptocurrency, but had rebounded somewhat by Friday.
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Elsewhere, the Bank of England (BoE) held interest rates at 3.75%. It was a widely expected move, although the 5-4 split among committee members resulted in a tighter vote than most analysts expected.
The European Central Bank (ECB) also opted to hold interest rates on Thursday, leaving them at 2%. This was the fifth time in a row that rates across the eurozone had been paused.
In the UK, the BoE’s decision was not a result that favoured most property buyers, particularly as housing affordability remains a barrier for many Britons.
In fact, the average UK house price has exceeded £300,000 for the first time, figures released by Halifax on Friday showed.
Several major firms reported earnings in the week just gone, including Shell (SHEL.L). Its first quarter results, released on Thursday, showed that the oil giant had missed profit expectations but was also returning more profits to shareholders, in the form of a $3.5bn (£2.6bn) buyback.
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Across the pond, Google’s parent company Alphabet (GOOG) and Amazon (AMZN) also both reported earnings. The latter’s announcement that it planned to pump $200bn into its AI efforts this year spooked investors and further contributed to the tech rout sparked by the software stock sell-off.
Russ Mould, investment director at AJ Bell, was among the analysts highlighting the uncertainty in the tech sector and beyond. “It’s been a week from hell for tech stocks as AI spending plans caused upset across global markets and pushed investors to unplug hyperscalers from their portfolios,” he said.
