Tech rally undermined by hot inflation figures
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The day started with high hopes for US stocks, after Micron’s blockbuster results last night.
However, sentiment on Wall Street was rattled after the Fed’s preferred measure of inflation surpassed 4pc for the first time in three years.
The tech-dominated Nasdaq Composite is currently down 0.4, after a bruising week which leaves it nearly 4pc lower than five days ago. The S&P 500 is doing slightly better and is currently trading 0.4pc up.
British equities are having a better day, with the FTSE 100 up 0.8pc. The FTSE 250, which is more reflective of Britain’s domestic firms, is trading 0.5pc higher.
Meanwhile, oil prices are up a nudge. Brent crude is up 0.3pc at $73.28 per barrel, still hovering around levels last seen before the war in Iran.
Saturday jobs in ‘huge decline’, says Whately
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Britain has experienced a “huge decline” in the number of Saturday jobs available for young people, the shadow work and pensions secretary has said.
Speaking about the growing problem of youth unemployment, Helen Whately said: “We’ve seen a huge decline in those Saturday jobs and casual work opportunities.”
She added that increases in the youth rate of minimum wage have meant that “somebody who is younger is not going to be more typically cheaper, so they’re more likely to go to a person with experience”.
She told the British Chambers of Commerce annual conference: It becomes so expensive that they [businesses] can’t afford to employ somebody.”
Tories criticise soaring youth worklessness
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The nation’s youth worklessness crisis is “a huge waste of talent” which is only getting worse, the shadow work and pensions secretary has warned.
Helen Whately told a panel at the British Chamber of Commerce’s annual conference: “We also have one million young people aged 16 to 24 not in education, employment, or training. … That’s that same number as the population of Birmingham, all of them, though not working.
“Just picture that, that is a huge waste of talent, and it’s a situation that’s been getting worse.”
Ms Whateley added that the nation’s youth worklessness crisis impacted young Britons across the the country, including those with a university degree.
She said: “We have lots of young people who are graduates from good universities sending some 100 applications and not getting jobs. We have a serious problem at the moment of not enough jobs.”
Micron overtakes Meta as valuation nears $1.4 trillion
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Micron has become more valuable than Facebook-owner Meta for the first time after the memory chipmaker’s solid forecast, which has reignited an AI rally on Wall Street.
The company’s shares were last up 18.5pc at $1,244.4, giving it a market capitalisation of $1.393 trillion, compared with Meta’s $1.391 trillion.
Micron’s fourth-quarter revenue and profit forecasts on Wednesday helped shares reverse a recent slump, with the company disclosing its customers had committed $22 billion to lock in supplies of memory chips.
Wall Street jumps in tech rally
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US stocks rose sharply at the opening bell after strong results from Micron ignited a fresh tech rally.
The tech-heavy Nasdaq Composite rose 0.6pc to 25,630.11 as the chipmaker surged by 18pc.
The S&P 500 rose 0.6pc to 7,400.51 and the Dow Jones Industrial Average gained 0.5pc to 52,130.90 as oil prices fell back to the levels seen before the start of the Iran war.
EasyJet gives US bidder more time to sweeten £4.9bn takeover offer
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EasyJet has given a hostile US bidder more time to sweeten its offer for the airline after its latest £4.9bn approach was rejected.
On Thursday, easyJet revealed Minneapolis-based investor Castlelake had offered £6.50 per share for the business – its fourth bid – which it had turned down.
However, the low-cost airline said it had agreed to give the US investor, which revealed a hostile takeover bid on Monday, greater access to its books and extended a deadline for it to make a final offer.
The deal would have given Castlelake a 49pc stake in the budget carrier. The remainder would have been held by Canadian investment giant Brookfield Asset Management and European nationals Peter Bellew, easyJet’s former operations chief, and Mark Breen, an Irish airline executive.
US inflation measure surpasses 4pc
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A closely watched measure of US inflation broke above 4pc for the first time in three years as the Middle East conflict boosted energy prices.
The personal consumption expenditures (PCE) price index rose to 4.1pc in May, up from 3.8pc in April, the Commerce Department said.
Core PCE, which is the US Federal Reserve’s preferred measure of inflation, rose from 3.3pc to 3.4pc.
The data covers the period before the US and Iran announced their deal setting out a pathway for a peace agreement in June.
Oil prices have fallen 22pc this month, easing pressure on inflation.
Putin losing £84m a day after Trump’s Iran deal
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Donald Trump’s peace deal with Iran has cost Vladimir Putin $110m (£84m) a day in lost oil revenues, new analysis shows.
A plunge in oil prices since the US president announced an agreement to move towards ending the war has hit Russia’s oil export sales.
In less than two weeks, the price of Brent crude has dropped from $87 per barrel to $72, below where it was when the war with Iran first broke out.
Benjamin Hilgenstock, director of the Center for Geoeconomics and Resilience at the KSE Institute, said a $15 drop in oil prices would reduce Putin’s revenues from oil and oil products by $110m per day compared to May levels.
Mr Hilgenstock stock: “At some point we’re going to return to the market as it was before the Iran war, and it could be potentially an even more oversupplied market.
“So this is going to get worse for Russia and the pain is going to be serious, because the Russian budget didn’t perform well even during the period of windfall earnings.”
Russia’s earnings from oil export have more than doubled from $10.4bn at the start of the year after the war sent oil prices soaring far above $100 a barrel in the spring.
It provided a lifeline for Putin’s ailing economy, which has been hit hard by the Kremlin’s war in Ukraine and is on the brink of recession.
Mr Hilgenstock said the financial pressure on Putin was likely to ramp up fast. Oil prices are expected to fall further if a more permanent Middle East peace deal is reached, particularly if it brings Iranian oil back onto the mainstream market.
The US and Iran signed a 14-point memorandum of understanding on June 17 (first announced on June 14) to extend the ceasefire and reopen the Strait of Hormuz.
Traders are hopeful of an imminent resolution to the conflict after mediators Qatar and Pakistan said the first round of negotiations between the US and Iran for a final deal had ended with “encouraging progress”.
Trump no longer a reliable ally, says Davey
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Donald Trump is no longer a reliable ally to Britain, Sir Ed Davey has warned hours after the US president called Andy Burnham the “mayor of a town”.
Asked about his criticism of Mr Trump, the Liberal Democrat leader said: “I’m not sure if Donald notices me that much. I don’t actually think he notices anybody,
“I think it’s important in the political debate in our country that people call a president out when he behaves the way he does, he’s put tariffs on... He’s no longer a reliable ally, insults our army.
“President Trump hasn’t given us anything, we got to stand up to Trump. The way you do that is by having other trade alliances by working with our European colleagues.”
Growth failure ‘driving anger’ at Labour, says Davey
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Labour’s failure to deliver economic growth is “driving anger” towards the government, the leader of the Liberal Democrats has warned.
In a speech, Sir Ed Davey said: “When you strip everything else away, it is the failure on growth that drives so much of people’s anger and frustration towards this government, just as it was their failure on growth that drove so much anger and frustration towards the conservatives before them.
He added that Britain needed to back businesses and boost trade as part of a plan to grow the economy.
Sir Ed said: “The only way to bring down those high borrowing costs to reassure investors and calm the gilt markets is to convince them that Britain has a real plan, a plan to grow our economy and get the public finances under control, a credible growth plan that our country has lacked now for a decade.”
He also said Britain’s high energy costs are damaging businesses and weighing on the nation’s economic growth.
“We have to get those costs down, but the answer is not, as some pretend, cutting ourselves off from clean renewable power and relying ever more on oil and gas instead” he said.
“Putin’s war on Ukraine and Trump’s war with Iran have shown the terrible folly of that, how damaging it is when we are so exposed to volatile oil and gas prices.”
He added that the UK needs to invest in renewables and make homes more energy efficient to bring down bills for households and businesses.
‘Don’t lurch to the left Andy’, Sir Ed Davey warns
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Sir Ed Davey, the leader of the Liberal Democrats, called on Andy Burnham to avoid a move to the left if he replaces Sir Keir Starmer as Prime Minister.
Speaking at the British Chamber of Commerce’s (BCC) annual conference, Sir Ed said: “It would be a terrible mistake for the new Prime Minister to think that the problem with Keir Starmer’s government is that it wasn’t left wing enough.
“Don’t lurch to left Andy, that’s a mistake the country cannot afford.”
He added: “The original sin of this government, and the last government is their failure on growth. If the next prime minister is going to solve all those other problems, they must start by firing up economic growth and fast.”
Wall Street poised for tech rally
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US stock indexes have climbed in premarket trading after strong forecasts from Micron and Qualcomm renewed optimism about AI.
The two chipmakers signalled robust demand for AI infrastructure, with customers committing $22bn (£16.7bn) to secure Micron’s memory chips and Qualcomm forecasting $15bn (£11.4bn) in data centre revenue by 2029.
Micron soared 18pc in premarket trading while Qualcomm jumped 11.5pc. Other memory chips also moved higher, with Sandisk, Western Digital and Seagate Technology rising between 15.2pc and 9.9pc.
The strong forecasts also sent tech shares across Asia and Europe sharply higher.
Micron and Qualcomm have rallied over 200pc and 50pc, respectively, in this quarter alone. The Philadelphia SE Semiconductor Index is on track for its strongest quarter on record, according to LSEG data.
Meanwhile, stocks have also been boosted by falling oil prices, with Brent crude dropping back to levels last seen before the start of the Iran war.
In premarket trading, the Dow Jones Industrial Average was up 0.2pc, the S&P 500 rose 0.6pc and the Nasdaq 100 had climbed 2.1pc.
Tax speculation will drag on business, warns Stride
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Sir Mel Stride said that constant speculation over tax rises under a Burnham government risks becoming one of the biggest problems for businesses over the summer.
The shadow chancellor said: “One of the biggest problems that will likely take place over the coming months is constant speculation around what he may do, including on the tax front.
“I think he can clear up that speculation by making a clear statement now that he will not place additional tax burdens on business.”
There has already been some speculation that Mr Burnham would increase the rate of capital gains tax.
Sir Mel said: “If you increase capital gains tax, the result of that will be people will probably delay actually disposing of some assets, so there’s a sort of economic asset allocation problem that then gets surfaced as a consequence of that.”
He added the UK needs “less speculation” about a fresh general election and instead should focus on a plan for businesses.
He said: “We will be ready for a general election whenever it comes.
“What the country needs at the moment is less speculation about general elections, and more of a clear plan from an incoming, new regime.”
He added that businesses were looking for the government to provide certainty and tackle the tax burden.
Bond market “at its limit”, says shadow chancellor
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The bond market is already at its limit over how much government borrowing it will tolerate, the shadow chancellor has said.
Sir Mel Stride warned that concerns about Britain’s ballooning debt pile and constrained public finances had left the UK with higher borrowing costs than Greece.
He said concerns about tax and spending plans risk higher government borrowing costs if Andy Burnham were to become prime minister.
He said: “We know that when Josh Simons stepped aside to get a clear the way for Andy Burnham to come back in and possibly become Prime Minister, the bond markets reacted to that immediately. There was an 18 basis point increase in our borrowing costs.
“We are right up against the limits in terms of credibility, and you wouldn’t and shouldn’t be out there saying we’re certainly going to borrow more.”
It comes as official figures released last week showed that the UK borrowed more than expected last month, in a sign of the legacy that could be inherited by Mr Burnham if he becomes prime minister.
Public sector borrowing hit £23.3bn in May, according to the Office for National Statistics (ONS), well ahead of forecasts of £18.9bn and the highest deficit for any May since the pandemic.
Burnham will ‘suffer Starmer’s fate’ if he raises taxes
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Sir Mel Stride has warned that if Andy Burnham introduces fresh tax rises on businesses he will end up resigning in the same way as Sir Keir Starmer.
In a speech on Thursday, the shadow chancellor said: “If he [Mr Burnham] is seriously thinking about doing more of the same, of taxing the regulating businesses, and thinking that will solve our problems, then he will ultimately suffer the same fate as Keir Starmer.”
Sir Mel warned that the MP for Makerfield is already causing economic uncertainty because of growing questions about fiscal policy under a potential Burnham government.
He said: “There is already more than enough uncertainty in the world today, and the government should not be adding to it. Andy Burnham needs to understand that even though he may not be Prime Minister yet, he is already having an impact on our economy.”
“We saw that when our gilt yields rose sharply on his announcement that he was running for Parliament.”
UK stocks rise amid market rally
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The FTSE 100 has risen following falls in oil prices and a rally in tech stocks.
Britain’s main index has risen 0.3pc after a series of strong updates from financial and retail companies.
The FTSE is lagging behind European peers as the drop in oil prices hits its energy giants, while defence companies have also taken a hit as the US and Iran continue peace talks.
However, its financial sector has risen 3.4pc, with private equity group 3i Group adding 9.7pc after its retail brand Action reported a rise in sales.
The mid-cap FTSE 250 was up 0.6pc. Greeting card retailer Moonpig jumped 10.3pc after announcing upbeat annual pre-tax profits, as customers traded up to higher priced gifts.
Bicycles and car parts retailer Halfords soared 16.1pc after forecasting better than expected 2027 profits.
Meanwhile, budget airline easyJet rose 6.2pc after rejecting a fourth, sweetened £4.9bn takeover proposal from US investment firm Castlelake.
It said it would grant the suitor limited access to commercial information in hopes of drawing a higher bid.
Burnham should rule out further tax rises on businesses, says Stride
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The shadow chancellor has urged Andy Burnham to rule out a future tax raid on businesses “to avoid another summer of damaging speculation”.
Speaking at the British Chambers of Commerce annual conference, Sir Mel Stride warned that uncertainty over further taxes rises on companies risks holding back investment and hiring decisions.
He said: “We’re in the middle of a huge political upheaval, and of course, with upheaval comes uncertainty, not least for businesses, with many of you being concerned about a new prime minister with an unknown economic agenda, speculation about possible further tax rises, and the prospect of the government moving the goal posts yet again.”
There are fears that lack of clarity over Mr Burnham’s tax and spending plans will fuel uncertainty and weigh on economic growth over the summer.
Sir Mel said: “We’ve heard nothing of note from Andy Burham about his economic plans. He’s talked about various potential new spending commitments without saying much about how he would pay for them, and he showed no signs so far at least with any willingness to grasp the nettle on restraining spending in areas like our balloting welfare bill.”
It comes as businesses are already beginning to question which taxes will rise under a Burnham government.
Britain ‘starving’ start-up businesses
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Britain is at risk of missing out on growth from new start-ups as many are constrained by a lack of finance, a former chief economist of the Bank of England has warned.
Andy Haldane, the president of the British Chambers of Commerce, said: “Too many of those potential scale-ups are being starved of sunlight and of water. Their lack of access to scale-up finance, or so many have been lost to overseas investors.”
He warned that without backing British start-ups the nation risks missing out on growth, adding that Britain’s biggest businesses are also in danger of moving overseas.
He said: “The UK has lost over 100 listed companies with a market cap over £100m since 2024. We simply cannot afford to allow the continuation of overseas stripping of our greatest growth asset on this scale.”
He urged Labour to launch more tax relief for businesses to drive economic growth.
He said: “If the government wishes to act at speed and scale … taking full advantage of the UK’s brilliant seed corn of businesses before they perish on the vine or are plucked off by overseas foreign raiders, will require this level of boldness of thinking in shifting among other things our taxation system.”
“Shifting them [tax relief] towards UK companies would leave investment choices in owners’ hands, while boosting significantly the returns on these in terms of UK business growth, jobs and productivity.”
He added that the current tax relief system delivers a very low return on investment for the UK but said reforms could change this and help create business growth.
Rubio insists no tolls for shipping through Hormuz
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Marco Rubio said there would be no tolls to use the Strait of Hormuz, helping push down oil prices further.
The US Secretary of State told Gulf allies any deal with Iran would take their interests into account, as he wrapped up a Middle East trip aimed at selling the Trump administration’s preliminary agreement with Tehran.
Speaking at a meeting of Gulf Arab foreign ministers and officials in Bahrain , he said Washington was seeking an enduring peace with Iran that would not undermine the security and prosperity of its allies in the oil-rich region.
Many Gulf powers fear the accord is too soft on Iran after it attacked them in the war.
Iran fought two of the world’s most powerful armies – the US and Israel – during the conflict and took effective control of the vital Strait of Hormuz, heavily disrupting oil flows and rattling the global economy.
Mr Rubio said: “The reality of it is that no country on Earth has the right to charge for the use of international waterways.
“And that will never be an acceptable condition of any deal. The president’s been fundamentally clear about that.”
Bahrain’s Foreign Minister Abdullatif bin Rashid Al Zayani, who chaired the gathering, welcomed Oman’s announcement of a corridor for the safe passage of vessels through the strait.
Labour’s workers’ rights act risks crushing business confidence
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Business leaders warned that Labour’s workers’ rights reforms risk piling costs on business and crushing confidence.
Shevaun Haviland, director general of the British Chambers of Commerce, warned: “Great care is also needed to prevent the Employment Rights Act having a similar confidence crushing effect.
“If imposed in full, even by the government’s own estimate, this package will cost £1bn for business.”
Labour’s Employment Rights Act, which obtained Royal Assent in December 2025, represents the biggest expansion of workers’ rights in over a decade, giving employees new protections over statutory sick pay, unfair dismissal and zero-hours contracts.
Ms Haviland added: “In adoption, we need to find a mix that works for all, and that means coming together, government unions and business, and accepting that there will be need to be compromises to make the package work.”
More taxes on business will be a ‘road to ruin’
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The head of one of Britain’s biggest business groups has warned piling more taxes onto businesses “will be a road to ruin” and will hold Britain’s growth back.
Shevaun Haviland, the director general of the British Chambers of Commerce, called on the next prime minister to avoid unleashing a further wave of tax rises onto companies across the country.
She told the group’s annual conference: “If we want to see growth, our political leaders must reduce the burdens on business, and just in case anyone is tempted, let me be clear. Taxing business more will be a road to ruin, the quickest way to destroy the fragile confidence that we have left.”
She added: “You must back business, not tax them, if you want to see growth.”
She said Labour policies had piled costs onto business, adding that the average small and medium-sized firm was paying 70pc more in government-imposed costs than 10 years ago.
“Policy choices have made the reality of doing business even tougher,” she said.
“At a time of huge economic shocks and global headwinds, successive UK governments have chosen to pile more and more costs onto companies. That is no way to deliver growth.”
She added that companies across the UK are battling rising minimum wage costs, business rates, climate levies and VAT thresholds.
The main challenge for the government is “delivering growth” no matter who is Prime Minister, she said.
“The difficult truth is, whoever leaves the UK, the primary challenge remains the same: delivering growth because everything else, jobs, taxes, teachers, nurses, public infrastructure, and social protection, it all relies first on economic growth.
“Many firms are already at breaking points. The cost of doing business is now suppressing the very growth we want to see.”
Borrowing costs rise despite drop in oil
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The cost of government borrowing has edged higher despite the latest falls in the price of oil.
The yield on 10-year gilts, a benchmark for what the Treasury pays to borrow money, has climbed from 4.68pc to 4.7pc.
However, it remains sharply down from the 18-year highs of 5.19pc reached in May when the uncertainty over the Iran war sent oil prices soaring.
Borrowing costs have fallen since the US and Iran agreed a pathway to a peace deal, with negotiations underway in Switzerland and ships resuming passage through the Strait of Hormuz.
Next Chancellor won’t want my advice, jokes Reeves
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Rachel Reeves said whoever is the next chancellor will not want her advice after being asked what advice she would give to the next occupant of Number 11.
She said: “I don’t think whoever is Chancellor next would want my advice, but my advice would be, you’ve got a brilliant set of officials at the Treasury who will back you if you’re clear about what you want.”
“I wanted to change how the economy works with a regulatory burden that is fairer and more efficient, and with a planning system that actually allows things to get built in our country.”
The Chancellor said she had attempted to encourage investment as she sought to addressing concerns from business leaders about her tax raising Budgets.
Speaking at the British Chambers of Commerce conference, she said “Businesses are absolutely critical to growth, and what government can do is provide the environment to encourage that investment.
“I have been pleased that the majority of the growth we’ve seen has been driven by investment, because that is the way to ensure that growth is sustainable. When I became Chancellor, I think that all businesses in this room will accept that the public finances were in a total mess.”
She defended her choices warning that unless she raised taxes on businesses the government would have “lost control of public finances”.
Ms Reeves said: “We don’t have to look to ancient history to know what that means but does that happen in just a few years ago when the government made a load of unfunded commitments.”
Reeves calls for drilling in North Sea
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Rachel Reeves has urged Ed Miliband to approve projects in the North Sea after it emerged he derailed a plan to fund Britain’s rearmament by ramping up drilling.
The Chancellor took aim at the man who is considered one of the frontrunners to replace her at Number 11 if Andy Burnham becomes the next prime minister.
Mr Miliband “vetoed” a plan approved by Ms Reeves and Sir Keir Starmer that would have seen tax revenue from the North Sea cover a significant chunk of the £18bn sought by the Ministry of Defence for military programmes.
The Chancellor suggested Mr Miliband was reneging on Labour’s manifesto commitment to honour existing licences for drilling.
Licences for the Rosebank and Jackdaw oil and gas fields were approved under the Sunak government before becoming subject o a judicial review. The decision on whether to approve them lies now with Mr Miliband as Energy Secretary.
Ms Reeves told the British Chambers of Commerce annual conference: “I think that the North Sea is a crucial asset for the UK and oil and gas will be a crucial part of our energy mix for years to come.
“I am very keen to make sure that we use that resource to ensure that energy security.
“There are decisions to be made shortly on both Rosebank and Jackdaw. Those are quasi-judicial decisions but in our manifesto we committed to honour existing licences and I hope that we do.”
Reeves has ‘unfinished business’ on devolution
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Rachel Reeves said she has unfinished business on fiscal devolution, as she makes a pitch to keep her job under a potential Andy Burnham premiership.
Speaking at the British Chamber of Commerce’s annual conference, Ms Reeves said: “I think the area where there’s certainly unfinished business is on fiscal devolution, and I’ve set out in last year’s budget a consultation, for example, on the visitor levy, which is something that mayoral combined authorities will have responsibility for.”
The Chancellor added: “I think that’s one area where I certainly want to make further progress, and I know that’s an area that Andy wants to.”
Reeves: Up to Burnham who he names chancellor
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It will be up to Andy Burnham to make a decision on who will be his Chancellor, Rachel Reeves has said amid speculation she could be demoted by him.
Speaking at the British Chambers of Commerce annual conference, Ms Reeves said: “Well, those would be choices for him.
“I’m not going to pre-empt those. When he becomes Prime Minister, he will make those decisions around the top team around him, but I’m not going to preempt that. Those are his decisions.”
According to Politico and Sky News, aides for Ms Reeves have been asking business leaders to lobby Mr Burnham for her to stay on as Chancellor.
She indicated that she would want to stay on as Chancellor if Mr Burnham arrives in Number 10. The MP for Makerfield is widely expected to take over from Sir Keir Starmer in July unless other leadership challengers emerge.
Burnham will be next PM, says Reeves
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Rachel Reeves says Andy Burnham will be the next prime minister.
Addressing the British Chamber of Commerce annual conference Ms Reeves said: “I think that Andy Burnham, who will be the next Prime Minister, has been really clear that he is committed to those fiscal rules.
“That is a good thing, because it means that businesses here can be confident that that stability, that rigor to policy making, that tight grip on the public finances.”
It comes after The Chancellor backed Andy Burnham for Prime Minister following reports that he is considering demoting Ms Reeves if he takes over from Sir Keir Starmer.
Reeves backs Burnham to be PM
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Rachel Reeves says she is “backing” Andy Burnham to be the UK’s next prime minister amid speculation she could be replaced as Chancellor if he takes office.
Ms Reeves would not be drawn on reports she may accept another role.
“I’m not going to pre-empt the decisions that the new prime minister will make,” she told the BBC.
“I’m backing Andy.
“I think he’d be a great prime minister, but those are his decisions, not mine to make.”
The Chancellor is due to speak shortly at the British Chambers of Commerce Global Annual Conference. Our reporter Emma Taggart is in the room at the QEII Centre in London and ready to send updates.
Falling oil means ‘no need to raise interest rates’
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The drop in the price of oil to levels last seen before the Iran war mean interest rates will not have to rise this year, an investment bank said.
Mohit Kumar, an economist at Jefferies, said he does not expect the Bank of England, US Federal Reserve or European Central Bank to raise borrowing costs.
He said he expects a “bigger repricing” in rates markets, where traders are still betting that the Bank of England will increase this year from 3.75pc to 4pc.
He said: “We have to admit that oil prices has moved lower than we expected, as the market focuses on the increased traffic through the strait.
“Yet the rates market has been reluctant to price in the impact of lower oil prices.
“In our view, one of the main impact from the US Iran deal is that central banks would not need to hike rates.”
European stocks rise in tech rally
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European shares rose after strong forecasts from Micron and Qualcomm reignited an AI-fuelled rally in tech companies.
The Continent-wide Stoxx 600 rose 0.3pc, with European tech stocks up 1.7pc.
Chipmakers Infineon and STMicroelectronics gained 5.2pc and 3.7pc, respectively, while semiconductor equipment suppliers BE Semiconductor and ASML climbed more than 3.5pc each.
Tech shares had fallen earlier this week amid concerns AI stocks were becoming overvalued.
Those fears were soothed after Micron Technology’s shares jumped nearly 16pc in after-hours trading after it upgraded its forecast and exceeded analysts’ estimates.
Stocks were also boosted by falling oil prices. The Cac 40 in Paris rose 0.1pc while the Dax in Frankfurt climbed 0.4pc. The FTSE 100, which has low exposure to tech, was flat.
Miliband derailed plan to use North Sea oil to fund defence
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Ed Miliband derailed a plan to fund Britain’s rearmament by ramping up North Sea drilling, The Telegraph can reveal.
A proposal to boost oil and gas production was modelled by the Treasury as fraught discussions took place between Downing Street and the Ministry of Defence over the delayed defence investment plan (DIP).
The Treasury is understood to have concluded that more drilling in the North Sea would generate enough tax revenue to cover a significant chunk of the £18bn sought by the Ministry of Defence for military programmes. The plan was backed by Rachel Reeves and presented to the Prime Minister.
However, a Cabinet source claimed Mr Miliband “vetoed” the North Sea proposal.
UK stocks mixed as oil falls
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The FTSE 100 fell at the open as falling oil prices dragged down its energy giants.
The UK’s flagship stock index declined 0.3pc to 10,428.43 as Shell fell 0.5pc and BP dropped 1pc.
However, the mid-cap FTSE 250 benefitted from the improved mood in markets, rising by 0.1pc to 23,130.36.
BP agrees Abu Dhabi gas deal
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Energy giant BP has agreed a deal to develop a gas field in Abu Dhabi.
The FTSE 100 group will take a 10pc stake in the Bab Gas Cap project, which is expected to produce as much as 1.5bn cubic feet of gas a day.
The Bab Field is one of the largest onshore oil fields in Abu Dhabi and the new development will “support UAE gas self-sufficiency”.
BP has had a presence in the emirate since 1939 and played a pivotal role in the discovery of oil in there in 1958.
Abu Dhabi National Oil Company, known as Adnoc, will hold a 60pc stake, with France’s Total Energies also holding a stake among others.
Markets ‘in buoyant mood’ over oil and AI
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The drop in oil prices and a surge in stocks has left markets in “buoyant mood”, an analyst has said.
Jim Reid, an analyst at Deutsche Bank, said: “It comes as flows through the Strait of Hormuz have continued to ramp up, with the number of vessels getting through at its highest since the conflict started.
“And more broadly, the oil price decline has eased fears about a stagflationary shock and aggressive rate hikes to deal with any inflation.”
He said the other positive story was Micron’s strong earnings, published after Wall Street closed on Wednesday.
He added: “So that reignited hopes about AI-fuelled growth and helped to push back against fears we were in some kind of bubble.”
Liberian tanker makes it through strait
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A Liberian oil tanker made its way out of the Strait of Hormuz on Thursday despite threats to shipping from Iran’s Revolutionary Guard.
The vessel used a new route close to Oman’s shore that has been promoted by a UN maritime agency.
The transit of the Stoic Warrior and the threats come as tensions rise between Iran and the United States over the terms of their agreement aimed at permanently ending the Iran war.
The two nations are increasingly debating the terms of the deal signed last week, from getting ships through the strait to the future of Iran’s stockpile of highly enriched uranium.
Through the signing of the memorandum of understanding, the US and Iran agreed to a 60-day period to iron out these and other details.
Until that happens — during private talks — leaders from both countries will also continue to negotiate in public, raising the risks of derailing the shaky ceasefire in the region.
Good morning
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Thanks for joining me. Oil prices have fallen to levels last seen before the start of the Iran war as shipping resumes in the Strait of Hormuz. Here is what you need to know.
5 things to start your day
1) Thames Water customers could receive shares to appease Burnham | Embattled utility’s creditors seek to fend off nationalisation by next prime minister
2) Burnham considering devolved income tax across Britain, says senior adviser | Economist says ‘constitutional devolution’ a key theme for expected next prime minister
3) Tennis stars play in Germany instead of UK because of high taxes | Disparity in levies blamed for the lack of senior talent choosing to play at Queen’s last week
4) Inheritance is driving a wave of early retirement | More people are being left money by loved ones and reducing their housing costs
5) Private jets are green, EU court rules | Plane-maker was right to claim aircraft’s carbon footprint relates to operation and not manufacture
What happened overnight
Asian shares surged after strong earnings and forecasts from chip giants Micron and Qualcomm revived the red-hot AI rally that has pushed global stocks to record highs.
Tech-heavy markets in Japan and South Korea rose sharply after American memory-chip giant Micron jumped by as much as 16pc in after-hours trading.
Its strong quarterly results blew Wall Street estimates out of the water. In the quarter to May 28, net income hit $28.2bn. It marks a 15-fold surge from the same period a year earlier, from $1.9bn.
The chipmaker had $33.3bn in operating income during the quarter, which is approaching levels similar to Apple, Microsoft and Alphabet. The blockbuster results will likely instil new confidence into tech stocks, after a rough week marked by a sell-off.
MSCI’s broadest index of Asia-Pacific shares outside Japan was 1.6pc higher. Japan’s Nikkei rose 4.6pc while South Korea’s Kospi gained 6.4pc and Taiwan stocks was 0.5pc higher.
Markets were also boosted by South Korea’s SK Hynix announcing plans to raise up to $29.5bn (£22.4bn) through a secondary listing on Nasdaq to capitalise on unending investor appetite for AI stocks.
Shares of SK Hynix and Samsung Electronics have powered the Kospi to record highs through the year, taking the year to date gains for the index to 112pc and making it the best-performing stock market in the world.
Meanwhile, oil prices extended their decline to levels last seen before the Iran war as stranded tankers exited the Strait of Hormuz.