A late PS: The Nasdaq has registered its biggest weekly percentage drop since early April as investors worried about the sustainability of a rally in artificial intelligence shares.
Although the tech-focused Nasdaq recovered from its earlier lows, it still posted a fall of around 3% for this week.
Closing post
Time for a recap.
Stock markets are ending the week in the red, as worries about the US economy and high technology valuations hit shares.
On Wall Street, the Nasdaq Composite has shed 2% today, adding to losses earlier this week.
According to the Financial Times, US tech groups closely tied to the artificial intelligence boom have lost more than $1tn in market value since last Friday.
The S&P 500 share index is down over 1%.
As well as fears of an AI bubble, the latest economic data is worrying investors. They learned today that US consumer confidence has dropped (see earlier post), a day after hearing that US job cuts jumped in October.
James Knightley, ING’s chief international economist for the US, explains:
The November reading of the University of Michigan sentiment index has deteriorated further, dropping to 50.3 from 53.6 relative to a consensus prediction of 53.0.
The expectations component dropped 1.3 points to 49, while the current conditions series fell 6.3 points to 52.3 - an all-time low for the monthly series - and this goes back to the 1970s! This is likely due to government shutdown concerns tied to SNAP food payments and ongoing non-payment of wages.
London’s FTSE 100 has ended the day at a two-week low, helping to pull European markets into their worst week since late August.
In other news…
ITV has said it is in preliminary talks to sell its broadcasting arm to the parent company of Sky in a £1.6bn deal, sending shares soaring.
UK house prices rose at their fastest pace since January, a leading property index shows, with demand improving despite market uncertainty over likely tax changes in this month’s budget.
The European Commission is considering plans to delay parts of the EU’s Artificial Intelligence Act, after intense pressure from businesses and Donald Trump’s administration.
The vital flow of chips from China to the car industry in Europe looks poised to resume as part of the deal struck last week between Donald Trump and his Chinese counterpart, Xi Jinping.
Worst week for European markets since August
European stock markets have posted their worst week since the end of August.
The pan-European Stoxx 600 index has closed down 0.6% tonight, taking its weekly losses to 1.3%.
That’s the biggest weekly fall since Friday 29th August, it appears.
FTSE 100 closes at near two-week low
Back in London, the stock market has ended the day at its lowest closing level in almost two weeks.
The FTSE 100 share index has closed down 53 points, or 0.55%, at 9682 points.
Property portal Rightmove finished the day as the top faller, down 12.5%, after outlining plans to spend more on artificial intelligence.
Airline group IAG fell 11.5%, after it reported a slowdown in demand for flights to North America last summer.
Updated
Wall Street’s worst week in a month ends today, points out Joe Mazzola, head trading and derivatives strategist at Charles Schwab, adding:
Focus remains on the D.C. shutdown and concerns about AI valuations that sent the tech-heavy Nasdaq Composite down almost 2% yesterday for the third major sell-off in the last few weeks.
Stocks continued their retreat this morning as Magnificent Seven stocks stayed red, including a nearly 2% pre-market drop for Nvidia.”
That has turned into a 4.3% drop for Nvidia since the market actually opened….
US small company stocks are also sliding.
The Russell 2000 index has just hits a seven-week low, down around 1.2% today.
Wall Street’s fear gauge, the CBOE Volatility Index, has hit its highest level in more than two weeks.
ING: Situation starting to turn ugly on the US jobs outlook
James Knightley, chief international economist at ING, is concerned by the latest US consumer sentiment data released today (see earlier post).
He explains:
The real concern though is regarding the jobs market. 71% of households now expect unemployment to rise over the coming 12M while only 9% expect unemployment to fall. That gives a net reading of 62% predicting higher unemployment versus 52% last month. A huge increase which as the chart below shows, has historically been the prelude to an ugly outcome for jobs.
Tesla is joining in today’s selloff, with its shares dropping by 3.5% today.
Tesla’s stock doesn’t seem to be getting a lift from yesterday’s approval of Elon Musk’s new $1tn pay deal, which incentivises the company’s CEO to hit some stretching targets.
CCLA, the UK’s largest charity asset manager, isn’t impressed by the huge pay package.
Dr James Corah, head of sustainability at CCLA, says:
“Putting the cult of personality, ideology and politics to the side, the announcement of Elon Musk’s pay package raises questions of governance that we, as investors for the longer-term on behalf of church, charities and local authorities, consider a red flag.
The question is – would any other listed business give any other person this kind of ‘incentive plan’? At CCLA, we believe that good governance demands accountability: no individual, however talented, should be so disproportionately empowered, nor considered the sole engine of success. We expect executive pay to be fair, proportionate, and aligned with long-term value creation, and we continue to challenge companies that fail to meet these standards.”
US consumer sentiment retreats, unless you're a big shareholder!
A closely-watched gauge of US consumer sentiment has fallen as anxiety over the government shutdown rises, although the wealthy aren’t sharing the gloom.
The University of Michigan’s consumer sentiment index has fallen by 6% this month, led by a 17% drop in current personal finances and a 11% decline in year-ahead expected business conditions.
Surveys of Consumers director Joanne Hsu cites fears that the shutdown is hurting growth, saying:
With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy. This month’s decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation.
There is one key exception, though, Americans with chunky shareholdings are in a jollier mood. Hsu says:
Consumers with the largest tercile of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets.
AI chipmaker Nvidia is the biggest faller on the Dow Jones Industrial Average in early trading, down 2.2%.
It’s followed by construction equipment maker Caterpillar (-2.1%).
FT: $750bn wiped off major AI stocks this week
The Financial Times has calculated that the market value of eight of the most valuable AI-related stocks — including Nvidia, Meta, Palantir and Oracle — has fallen by more than $750bn since the end of last week.
Updated
Wall Street falls as economic concerns and valuation worries hit stocks
Wall Street has opened in the red as jitters over the health of the US economy, and sky high tech valuations, continue to hit the markets.
The Dow Jones industrial average, of 30 large US companies, has dropped by 209 points, or 0.45%, in early trading to 46,703 points.
The broader S&P 500 index is down 0.6%, and the tech-focused Nasdaq has lost almost 1%.
Fawad Razaqzada, market analyst at City Index, says:
“Risk appetite continued to weaken Friday morning as European stocks and US futures resumed their slide after a brief bout of dip-buying faded – the sort of price action we have been accustomed to all week really.
Some analysts warn that this year’s artificial-intelligence-led rally has finally come to a halt, while others suggest markets needed to cool down anyway with indices racing to record highs without much pause and new stimulus.”
This has been a tricky week for the markets – the S&P 500 and the Dow are both set for their steepest weekly loss in four, while the Nasdaq is poised for its worst weekly performance since March, Reuters reports.
The selloff seems to be driven by anxiety over the ongoing US government shutdown, the resulting dearth of economic data, and warnings that an AI bubble might burst soon.
Stocks fell yesterday after a report that US company job cuts jumped in October.
European stocks remain in the red today too – the FTSE 100 is now down 95 points, or almost 1%, at 9640 points.
China poised to lift ban on chips exports to European carmakers after US deal
The vital flow of chips from China to the car industry in Europe looks poised to resume as part of the deal struck last week between Donald Trump and his Chinese counterpart, Xi Jinping.
The Netherlands has signalled that its standoff with Beijing is close to a resolution amid signs China’s ban on exports of the key car industry components is easing.
The ongoing US government shutdown has deprived us of the latest monthly US jobs report, alas.
But Canada has stepped into the news vacuum with its own non-farm payroll report.
It shows that employment across Canada increased by 67,000 ( or 0.3%) in October, the second consecutive monthly increase.
This lifted the Canadian employment rate by 0.2 percentage points to 60.8%, while the unemployment rate declined 0.2 percentage points to 6.9%.
The potential sale of ITV’s media arm to Sky would be “anything but straightforward”.
So says Juliane Althoff, film and TV lawyer and partner at media and entertainment law firm Simkins LLP:
“A sale of ITV’s media and entertainment arm to Sky would be anything but straightforward, not least because ITV’s entertainment arm forms a huge part of its public service broadcasting identity.
“If this deal were to proceed, it would represent a seismic shift in the UK’s broadcasting landscape and could fundamentally reshape how British audiences access homegrown content. It would raise complex regulatory and policy questions and require close scrutiny by Ofcom and the Competition Markets Authority to ensure continued variety given Sky’s existing market presence in the pay-tv sector.
“There are countless legal and commercial issues to consider: existing talent contracts, rights chains and content licensing and any potential change of control triggers, to name just a few. These are all compounded by the involvement of third-party producers and cross-border financing structures, all of which would require careful negotiation.”
Goldman Sachs predicts UK interest rates will fall to 3% by July 2026
Investment banks are predicting the Bank of England will cut interest rates in December, after narrowly deciding to leave them on hold yesterday.
Goldman Sachs (which had expected a cut on Thursday) is still forecasting four cuts by next summer.
It told clients that the Bank’s Monetary Policy Committee is likely to cut further than the market expects, if the data come in weaker than the Committee’s expectations, adding:
Taken together, we therefore now forecast cuts in December, February, April and July (vs November, February, April and July) to an unchanged terminal rate of 3%.
ITV are still the top riser in London this morning, up almost 15% after confirming it could sell its broadcasting operations to Sky.
Chris Beauchamp, chief market analyst at IG, says the talks have given ITV’s share price a “much-needed shot in the arm”, explaining:
“The woeful story of ITV’s share price has been given a lift by today’s news, but it shouldn’t obscure how disappointing performance has been over the last decade.
The chunky dividend helps, but there is a major risk that the deal won’t go through, or will be heavily modified, so investors should be careful about tuning in late to this story.”
Indeed, in November 2015 ITV’s share price was around £2.40 – right now, it’s 77.6p.
European stock markets are on track for their worst week since August.
The Stoxx 600 index is down 0.85% today, putting it on track for a 1.5% weekly decline, as market are hit by worries about an AI bubble and the health of the US economy.
In London, the FTSE 100 index is down 70 points or 0.75%, with RightMove (-12%) still leading the fallers after its plans for an AI investment splurge worried investors.
Data yesterday showing a jump in US job layoffs hit Wall Street, where further losses are expected today.
Shares in British Airways owner International Airline Group (IAG) are down over 8% this morning after it reported a drop in demand for economy fares on transatlantic flights this summer.
IAG told shareholders that the North Atlantic market saw “some softness in US point of sale economy leisure”, while prices across its airlines were lower in the European market because of “high growth by British Airways and more competitive markets elsewhere”.
Pre-tax profits in the three months to the end of September fell by 2.1% to €1.87bn (£1.64 billion), down from €1.91bn a year ago.
IAG – which also owns Aer Lingus, Iberia and Vueling – reported a 2.4% increase in its capacity, but a 2.4% decline in passenger revenue.
Tom Ward, an industry analyst at Bloomberg Intelligence, has called the talks between ITV and Sky a “positive surprise” for ITV.
Ward says the potential price tag implies a “healthy multiple” of almost 8 times next year’s earnings before interest, taxes, depreciation and amortization. The market hasn’t been attributing much value to the media and entertainment unit, Ward wrote in a research note Friday, Bloomberg reports.
ITV’s bosses and investors will be delighted that Comcast might buy its broadcasting arm, explains Dan Coatsworth, head of markets at AJ Bell:
“The jewel in ITV’s crown has long been its production arm which makes TV shows for broadcast on its channels as well as licenced to third parties. This part of its business, called ITV Studios, was always seen as the most likely bit to receive a takeover offer.
“The fact the media and entertainment arm has attracted a suitor, rather than Studios, is a surprise. There was a lot of uncertainty over whether anyone would want to relieve ITV of this ball and chain, so to see interest from Sky is Christmas come early for management and shareholders.
“ITV’s media arm includes the TV channels and ITVX streaming service, both of which act as platforms to carry third party advertising. Linear TV viewing is in a slow decline, with households increasingly showing a preference to watch on-demand streaming services or YouTube.
“ITV has done a fantastic job of staying relevant with the ITVX platform, and it’s fair to say that has been a much bigger success than people thought when it originally launched. It’s given ITV some breathing space to figure out what the future of the group should be, and it was clear that a break-up could be the logical path to follow.
World food prices fall for second month running
Good news in the fight against inflation – world food prices have fallen for the second month running.
The United Nations’ Food and Agriculture Organization (FAO) has reported that world food commodity prices fell in October, adding to a drop in September, thanks to ample global supplies and
The FAO Food Price Index, which tracks a basket of globally traded food commodities, averaged 126.4 points in October, down from a revised 128.5 in September. That’s 21.1% below its record high, set in March 2022.
The FAO reports that lower price indices for cereals, dairy products, meat and sugar in October outweighed an increase in the vegetable oil index.
The report says:
The FAO Cereal Price Index fell 1.3% in October and was 9.5% lower than a year ago, with wheat price falling thanks to “ample global supplies, favourable production prospects in the southern hemisphere where harvesting is underway, and steady progress of winter wheat planting across the northern hemisphere”.
Meat prices fell 2.5% in the month, but were 4.8% higher than a year ago. October saw sharp drops in pig and poultry meat prices and a fall in ovine meat prices, partially offset by higher bovine meat quotations.
Dairy prices fell 3.4% in October, but were 2.7% higher than a year ago.Butter fell by 6.5%, due to “ample export availabilities” from the EU and New Zealand. Whole milk powder by 6.0%, skim milk powder by 4.0%, and cheese by 1.5%.
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The biggest losses were on the FAO Sugar Price Index, which dropped by 5.3% during the month and was 27.4% lower than a year ago. The drop was mainly driven by expectations of ample global sugar supplies, with favourable weather in Brazil’s key southern growing regions, and expectations of higher output from Thailand and India.
Also, lower international crude oil prices pushed down sugar prices, due to lower demand by the biofuel sector.
However, the Vegetable Oil Price Index rose 1.5% in October to its highest level since July 2022, due to higher quotations for palm, rapeseed, soy and sunflower oils.
Rightmove shares plunge after it lays out AI investment plans
At the other end of the market, shares in property portal Rightmove have plunged by over 15% this morning, after it outlined plans to invest more in AI.
Investors seem unimpressed by Rightmove’s latest trading update, in which it predicts underlying operating profit growth will slow to 3-5% in 2026, down from 4-9% in 2024 and 2025.
Rightmove insists it is delivering “strong business value” from its platform. But it is also planning to boost its investments – including rebuilding its app, and boosting its AI-powered search capabilities.
It will also add AI interfaces to its backend infrastructure, including “AI interfaces to drive efficiency, speed and value for Rightmove and its partners”.
Rightmove insists these plans will lead to higher profit growth in the long term.
Johan Svanstrom, CEO of Rightmove, said:
“AI is now becoming absolutely central to how we run our business and plan for the future. We are already working on a wide range of exciting AI-enabled innovations for the benefit of our partners and consumers, and see vast potential utilising our leading reach and connected data.
We are investing to accelerate our capabilities, which we are confident will create an even stronger platform and higher-growth business over time. We aim to further advance our leading digital position in the UK property ecosystem.”
Updated
ITV shares hit one-month high
ITV’s shares have risen to their highest level since early October.
2025 had been a tough year for the company; yesterday, its shares were down 8% since the start of January.
This morning’s 18% surge means ITV’s shares are now up almost 9% year-to-date.
ITV shares jump 18%
Shares in ITV have jumped by 18% at the start of trading in London, after it confirmed it is in talks with Sky about the possible sale of its broadcasting operations.
ITV’s shares have risen sharply to 80p, up from a closing price of 67.7p last night, making it the top riser on the FTSE 250 index of medium-size companies listed in the City.
That lifts the company’s value to around £3bn, I calculate, up from just over £2.5bn last night.
Updated
UK house prices rise at fastest pace since January
Despite pre-budget uncertainty, UK house prices jumped by 0.6% last month according to new data from lender Halifax.
Halifax reported that the value of the average UK home increasing by almost £1,650 last month to £299,862 – the highest on record. This also lifted the annual rate of hous inflation to 1.9%, from 1.3% in September.
Amanda Bryden, head of mortgages at Halifax, said:
“Demand from buyers has held up well coming into autumn, despite a degree of uncertainty in the market, with the number of new mortgages being approved recently hitting its highest level so far this year.
“There is no doubt that affordability remains a challenge for many. Average fixed mortgage rates are currently around 4% and likely to ease down further, but with property prices at record levels, moving home can feel like a stretch.
According to @HalifaxBank HPI prices rose 0.6% in October after a fall of 0.3% in September. As a result the average UK property price, on this index, is now £299,862. Rising prices have arisen from significant growth in more affordable regions. Northern Ireland is up 8%,… pic.twitter.com/bDOujI4GoM
— Emma Fildes (@emmafildes) November 7, 2025
ITV talks: What the media say
There’s lots of interest in the prospect that ITV could be split, and its broadcasting arm gobbled up by Sky.
The Financial Times suggest it could unlock value:
A split of ITV’s operations is one of a number of options that the broadcaster’s management, led by chief executive Carolyn McCall, has looked at as part of efforts to boost the value of the company.
McCall’s team believes ITV is undervalued on the stock market.
The broadcaster is being advised by banks Robey Warshaw and Morgan Stanley. Some analysts argue the value of ITV’s studio arm alone, which makes TV shows such as Love Island, could be worth as much or more than the company’s current market capitalisation.
Bloomberg say it would be a bold move by Comcast:
Doubling down on UK broadcasting would mark a gutsy bet by Comcast, which has written down the value of Sky by billions of dollars since acquiring it for $39 billion in 2018. The US company agreed in June to sell its German business Sky Deutschland for an upfront price of €150 million ($173 million), a fraction of its valuation in previous years, showing how much the market for European broadcasters has deteriorated.
Comcast’s deliberations are ongoing and may not lead to a transaction, the people said, asking not to be identified because the information is private.
The BBC throws a little shade at its broadcasting rival, suggesting a takeover could be a rescue deal!
Media analyst Ian Whittaker told the BBC that a combination of Sky and ITV would mean that had “70% plus” of the UK TV advertising market, which he said “in normal circumstances” would be rejected by regulators because of the dominance it would give them.
But he added that with questions hanging over the future of TV, a takeover could be seen as almost a rescue deal.
Comcast’s potential purchase of ITV’s media and entertainment business would not include its production arm ITV Studios.
Studios has made a number of hit shows in recent years, including Love Island, I’m a Celebrity and Mr Bates vs The Post Office.
My colleague Mark Sweney reported last night:
The performance of ITV Studios has led analysts to argue that the production arm alone could be worth more than the broadcasting business, which includes some of the UK’s most popular channels.
ITV confirms it is in talks to sell its broadcasting arm
Newsflash: ITV has confirmed that it is in talks about the posssible sale of its media and entertainment operations to rival Sky.
In a statement to the City this morning, ITV says:
ITV plc notes the recent press speculation and confirms that it is in preliminary discussions regarding a possible sale of its M&E business to Sky for an enterprise value of £1.6bn.
The statement comes hours after reports that Comcast, the parent company of Sky, was in talks to buy ITV’s broadcasting business, a move that would upend the British television landscape.
ITV cautions that a sale isn’t certain, telling the City this morning:
There can be no certainty as to the terms upon which any potential sale may be agreed or whether any transaction will take place. A further announcement will be made in due course if appropriate.
News of the possible deal came shortly after ITV reported that it would “temporarily” cut £35m from its budgets as it deals the poor macroeconomic environment and advertiser uncertainty ahead of the budget later this month.
The company said it expected advertising revenues, which still account for most of its income, to fall by 9% in the key fourth-quarter advertising period in the run-up to Christmas.
Introduction: Bank of England governor Bailey pledges to serve out full term
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Bank of England governor Andrew Bailey is pledging not to be driven out of the central bank early by Nigel Farage.
Shortly after leaving UK interest rates on hold yesterday, Bailey declared that he intends to remain governor of the Bank of England until his term expires.
Asked about suggestions from Farage that he would replace the governor, if he became prime minister, Bailey told Bloomberg TV:
“I made a commitment to serve out my whole term. That’s what I intend to do.”
Farage started a hare running about Bailey’s future last month, when he said of Bailey “He’s had a good run, we might find someone new….He’s a nice enough bloke.”
However, Farage always seemed unlikely to determine Bailey’s leadership, given the governor’s single eight-year term is due to end in March 2028 and the prime minister, Keir Starmer, is only required to hold a general election sometime before 15 August 2029.
It emerged yesterday that Bailey was the swing voter on the Monetary Policy Committee, after it split 5-4 on whether to hold interest rates at 4% or cut to 3.75%.
The agenda
7am GMT: Halifax’s UK house price index
8.30am GMT: UN FAO food price index
12.15pm GMT: Bank of England’s chief economist Huw Pill briefs the BoE’s regional agents
