Stocks close higher with all eyes on the US Federal Reserve

Stock prices in London closed in the green on Wednesday, following the Bank of Canada’s rate cut and ahead of the US Federal Reserve’s own announcement, at which its own reduction is expected.

“Markets have fully priced in a 25-basis-point (US) rate cut, but the key lies in the updated summary of economic projections and (Fed Chairman Jerome) Powell’s tone,” commented Naga analyst Frank Walbaum. “Should policymakers reinforce the prospect of multiple cuts in the next months, equities could edge higher. Conversely, any signs of hesitation may trigger profit-taking at current levels.”

Meanwhile, in the UK, Donald Trump’s historic second state visit commenced.

Mr Trump and his wife were treated to a personal greeting outside Victoria House, a little-known property on the royal family’s private Windsor estate. His formal ceremonial welcome in Windsor Castle’s quadrangle featured the largest ever guard of honour for this occasion.

The FTSE 100 index closed up 12.71 points, 0.1%, at 9,208.37. The FTSE 250 ended up 127.94 points, 0.6%, at 21,619.81, and the AIM All-Share closed up 3.99 points, 0.5%, at 771.86.

On the FTSE 100, Barratt Redrow gained 1.9%.

The housebuilder’s pre-tax profit in the year to June 29, when including Redrow, which merged with Barratt in October, decreased on-year to £273.7 million from £363.2 million. Revenue declined to £5.58 billion accounting for both businesses, while total home completions rose to 16,565 from 14,004.

However, Barratt Redrow posted adjusted pretax profit of £591.6 million before purchase price adjustments, ahead of its July prediction in line with the consensus of £582.6 million.

Games Workshop rose 1.2%.

The fantasy game figurine maker and retailer said trading to August 31 is in line with its expectations for the current financial year. It also declared a dividend of 85 pence, more than doubling the total dividends declared so far in financial 2026 to £2.25.

On the FTSE 250, PRS REIT gained 6.2%.

The real estate investment trust has entered into non-binding heads of terms to sell its operating subsidiary, PRS REIT Holding Co Ltd, and potentially liquidate its assets. The proposed buyer is an investment vehicle owned by a fund advised by real estate investor Waypoint Asset Management.

In European equities on Wednesday, the CAC 40 in Paris closed down 0.5%, while the DAX 40 in Frankfurt ended up 0.1%.

The pound was quoted higher at 1.3661 dollars at the time of the London equities close on Wednesday, compared to 1.3642 dollars on Tuesday. The euro stood at 1.1847 dollars, higher against 1.1837 dollars. Against the yen, the dollar was trading lower at 146.35 yen compared to 146.65 yen.

In US news, building permits and housing starts declined in August, data published by the US Census Bureau and the US Department of Housing & Urban Development showed.

Privately-owned housing units authorised by building permits in August fell 3.7% to a seasonally adjusted annual rate of 1.31 million, from 1.36 million in July. This was below the FXStreet-cited consensus of an uptick to 1.37 million.

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1.31 million, down 8.5% from 1.43 million in July and below the consensus of a milder decrease to 1.37 million.

Stocks in New York were mixed. The Dow Jones Industrial Average was up 0.7%, the S&P 500 index down 0.1%, and the Nasdaq Composite down 0.5%.

The yield on the US 10-year Treasury was quoted at 4.04%, narrowing from 4.05%. The yield on the US 30-year Treasury was quoted at 4.64%, narrowing from 4.66%.

Meanwhile, the Bank of Canada cut its key interest rate as expected by 25 basis points to 2.5%.

“With a weaker economy and less upside risk to inflation, the Governing Council judged that a reduction in the policy rate was appropriate to better balance the risks,” the Bank of Canada said in its statement. “Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity.”

Brent oil was quoted lower at 68.04 dollars a barrel at the time of the London equities close on Wednesday from 68.32 dollars late on Tuesday.

Gold was quoted at 3,685.67 dollars an ounce against 3,680.32 dollars.

The biggest risers on the FTSE 100 were Marks & Spencer, up 14.4p at 357.8p; Centrica, up 5.8p at 169.2p; Coca-Cola Europacific Partners, up 210p at 6,640p; Segro, up 12.6p at 646p; and Barratt Redrow, up 6.8p at 373p.

The biggest fallers on the FTSE 100 were Fresnillo, down 56p at 2,186p; Anglo American, down 57.5p at 2,518.5p; BAE Systems, down 41p at 1,955.5p;  Endeavour Mining, down 46.5p at 2,813.4p; and Glencore, down 4.3p at 306.2p.

On Thursday’s economic calendar, all eyes will be on the Bank of England’s interest rate decision. US weekly jobless data and Australian unemployment are also scheduled.

On Thursday’s UK corporate calendar, Renishaw releases its full-year results and Next has its half-year earnings. Auto Trader and Foresight Environmental Infrastructure both have their annual general meetings.

Contributed by Alliance News.