King Charles Presents Labour Agenda, Gold Hits Record High

King Charles will present the Labour government's economic agenda in the UK, while markets focus on Britain's inflation trends. Gold prices hit record highs in Asia due to expectations of interest rate cuts, and Taiwanese chipmaker TSMC's shares fell 1.4% following comments by Donald Trump. ASML is set to report earnings with anticipated booming new orders.

Equities

The FTSE 100 dropped 0.2% on Tuesday, marking its second consecutive session in the red, primarily due to a slump in luxury goods and commodity stocks. Burberry fell sharply by 5.3%, continuing its decline after a significant 16% drop on Monday when it warned of profit issues, scrapped its dividend, and dismissed its CEO. The broader European luxury sector also struggled, with Hugo Boss and Richemont reporting weaker sales in China.

Mining and energy stocks suffered as well, with Shell, Glencore, and Rio Tinto losing between 0.9% and 2.3%. Additionally, Rio Tinto's shares were hit by underwhelming second-quarter iron ore shipment figures.

The mid-cap FTSE 250 edged up 0.1%, helped by a 5.9% surge in Ocado shares. The online supermarket and technology group reported a smaller first-half loss and raised its annual forecast, boosting investor confidence. Discount retailer B&M also saw a 4.3% increase in its stock price after reporting higher first-quarter revenue and opening 19 new stores.

On the other side of the Atlantic, the Dow Jones Industrial Average rose 1.85% to a record closing high, driven by robust retail sales data, which suggested the Federal Reserve might ease its monetary policy soon. UnitedHealth Group soared 6.5% after reporting better-than-expected profits, lifting both the Dow and the S&P 500 Health Care index to new highs.

Bank of America's second-quarter profit exceeded expectations, with its shares climbing 5.3%. The bank also reported increased underwriting fees and provided an optimistic net interest income outlook. In contrast, Charles Schwab saw a 10.2% drop in its stock price after reporting a dip in interest income.

The S&P 500 gained 0.64%, with industrials showing the largest percentage gains. However, technology and communication services sectors ended in negative territory. Nvidia and Microsoft led the tech sector's losses, capping the Nasdaq Composite's gains to just 0.2%.

Forex & Commodities

The British pound edged up 0.1% on Wednesday after UK inflation data showed a rise slightly above expectations, with headline inflation holding at 2% in June and services inflation at 5.7%. However, core inflation was in line with forecasts. Despite the initial bounce, sterling settled flat at $1.2973.

The US dollar remained mixed against other currencies, failing to maintain gains from the previous day's strong retail sales data. The dollar index was flat at 104.21. The euro firmed slightly to $1.0900, while the Australian dollar remained stable at $0.6732. The New Zealand dollar rose 0.3% to $0.6068, supported by high domestic inflation despite a headline figure miss. The yen increased by 0.2% to 158.04 per dollar amid potential intervention from Japanese authorities.

Gold prices surged over 1% to a record high, with spot gold hitting $2,464.82 per ounce and US gold futures settling at $2,467.80.

Oil prices eased, with Brent crude futures falling 15 cents to $83.58 a barrel and US West Texas Intermediate crude futures dropping 13 cents to $80.63.