After an early gain the FTSE 100 took a step back on Thursday as investors tried to decipher the latest meeting of the US Federal Reserve, says AJ Bell investment director Russ Mould.
“In some ways Fed chair Jay Powell and his colleagues delivered what the market wanted which was a commitment to keep interest rates low. However, it is now a question of the credibility of this argument.
“Powell has delivered a similar message a few times and yet investors’ nagging fear about inflation and the implications for rates have continued to see bond yields surge.
“He seemed to have some impact on US stocks – with the Dow Jones surging to a new record level. The FTSE was also outstripped by European markets ahead of a key decision on the safety of the AstraZeneca vaccine by the EU regulator.
“Not helping UK stocks was a certain amount of nervousness ahead of the Bank of England’s decision on rates and news of a vaccine shortfall which could stall the UK’s so far rapid inoculation of its population.”