London pre-open: Stocks to drop as Trump renews threats against Iran; inflation in focus

(Sharecast News) - London stocks were set to slide at the open on Wednesday as Donald Trump threatened once again to resume strikes on Iran and as investors mulled the latest UK inflation data.

The FTSE 100 was called to open around 70 points lower.

Speaking to reporters at the White House on Tuesday, US President Trump said he was "an hour away" from deciding whether to strike Iran before he was convinced to call it off for a few days. When asked how close he was to ordering an attack, Trump told reporters the US was "all set to go" and "it would have been happening right now".

Asked how long Iran has to make a deal, Trump said he was giving Tehran "two to three days" and that the US "is not leaving Iran yet" and is "going to do it right".

Meanwhile, a spokesman for Iran's army warned that Tehran would open new fronts if attacked.

On home shores, figures from the Office for National Statistics showed that inflation eased in April despite the war in the Middle East.

The consumer price index rose 2.8% in the 12 months to April, down from 3.3% in March and below consensus for 3%. The fall was driven by lower electricity and gas prices, following a reduction in the regulator's cap on charges.

Core CPI, which strips out more volatile energy, food, alcohol and tobacco prices, rose by 2.5%, down from 3.1% a month previously.

Looking ahead to the rest of the day, all eyes will be on first-quarter results from US chip giant Nvidia, which are due after the close of markets in the US.

Kathleen Brooks, research director at XTB, said analysts expect the company to report revenues of $79.1bn, up 80% in a year, earnings per share of $1.77, and net income, or profit of $43.13bn, more than double compared to a year ago.

"The market is expecting another monster report later tonight, however, the question is whether Nvidia can continue to beat expectations and if forward guidance will be enough to wow a market that is taking a breather after an epic rally," she said.

"Ahead of Nvidia's earnings report, there has been a pullback in tech stocks and the Nasdaq 100 is lower by nearly 1% in recent days. This suggests that the next leg of the AI trade, and the US stock market rally, could depend on tonight's results."

In UK corporate news, retailer Marks & Spencer posted a sharp fall in annual earnings, reflecting the impact of last year's cyberattack, but said profits had recovered in the second half.

Adjusted profit before tax for the 12 months to 28 March fell 23.8% to £671.4m with the second half recording a 4.1% rise.

"The outlook for the current year includes higher fuel, freight and input costs and continued government tax levies and regulatory headwinds for the sector. These are being mitigated through improved buying, reinvestment in value to drive volume, and savings from the structural cost reduction programme," M&S said.

Final results from British Land showed a record year of leasing for the real estate investment trust, helping underlying profits to rise 5% to £294m. The firm said it benefited from its positions in campuses and retail parks, where demand is growing, and supply remains constrained.

"While the geopolitical and interest rate backdrop has become more uncertain, the occupational fundamentals underpinning our portfolio are as strong as I have seen them," said chief executive Simon Carter.