And finally, the UK’s blue-chip share index has ended the day at a new closing high,The FTSE 100 has closed 87,75 points higher at 10,402 points, as investors continue to move into old-economy stocks as AI fears hit the software sector,Gambling firm Entain (+10,4%) was the top riser, followed by services firm DSS (+7.

8%) and then pharmaceuticals group GSK (+6.9%), which hit a 26-year high after reporting financial results this morning.Beazley closed nearly 6.9% higher too, after Zurich Insurance reached an agreement on “key terms” of an £8bn takeover offer for the company.But fallers included accountancy software firm Sage (-2.

9%), as Anthropic’s launch of an AI legal tool continued to rattle data software companies across Europe, in the US and across Asia-Pacific markets (see opening post),James Reilly, senior markets economist at Capital Economics, says:We don’t think the falls suffered by software stocks in recent days are indicative of waning enthusiasm for AI,We think investors will continue to judge that the benefits accruing from AI will outweigh the costs, driving the stock market higher this year,Here are today’s main stories:Here’s a neat ‘chart of the day’ from Deutsche Bank this afternoon, showing the drawdowns from their 52-week highs for selected US tech and tech related stocks, and some private equity firms who have exposure,There have been “some brutal moves”, points out Deutsche’s Jim Reid, adding:An additional stand out is that the Mag 7 index as a whole is only about -1% off its peak, even though six of the seven names are down between -5 and -25%.

The outlier, Alphabet, is up nearly +25% over the last three months and roughly +75% over the last six.That +75% translates into around $1.7 trillion in market value.Shares in Uber have dropped 5% in early trading, after missing profit forecasts despite record demand for rides.Uber reported earnings per share of $0.

71 in the last quarter of 2025, a rise of 27%, but below forecasts of $0,79,Looking ahead, it expects adjusted EPS of 65 cents to 72 cents in the current quarter, with the entire range below the FactSet consensus of 75 cents,The disappointing earnings came despite revenue rising above forecasts, with quarterly trips and gross bookings both up 22% year-over-year,Dara Khosrowshahi, CEO, says:“Uber accelerated into another record-breaking quarter, with more than 200 million monthly users completing more than 40 million trips every day—our largest and most engaged consumer base ever.

“We enter 2026 with a rapidly growing topline, significant cash flow, and a clear path to becoming the largest facilitator of AV trips in the world.”Business activity growth in the US services sector picked up in January amid a stronger rise in sales, the latest poll of purchasing managers shows.January’s S&P Global PMI survey of US private service sector companies shows there was a steeper uplift of new work last month.However, consumer confidence remained subdued.The US services PMI rose to 52.

7 in January, up from 52,5 in December, showing the sector has been expanding for three years,The report says:Tariffs and economic uncertainty nonetheless limit growth ratesEmployment numbers increase marginallyInflation rates remain elevated, but weaken since end of 2025Chipmaker AMD (-12%) and software firm AppLovin (-13,2%) are leading the fallers on the Nasdaq index,AMD is out of favour after its first-quarter forecast fell short of some analyst expectations last night.

while AppLovin is casualty of the fears over AI’s impact on the software sector.The main US stock indices are mixed at the start of trading, as investors rotate out of technology stocks and into other sectors.The Dow Jones industrial average, of 30 large US companies, was up 198 points or 0.4% at the open to 49,439 points.Biotech firm Amgen (+3.

2%) are the top riser, followed by paint and coatings firm Sherwin-Williams (+2.2%) and construction equipment maker Caterpillar (+2%).Tech firms are lagging, though, with IBM (-3.9%) and Salesforce (-2.4%) leading the fallers.

The broader S&P 500 index is flat, while the tech-focused Nasdaq is down 0,23%,The FTSE 100 is heading even higher as traders in New York prepare to begin work,The UK’s blue-chip stock index is now up 147 points, or 1,4%, at 10,461, a new intraday peak.

Dr Nela Richardson, chief economist at ADP, also reports that hiring slowed across American companies last year:“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024.While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.”Hiring across American companies slowed last month, as professional and business services firms, and manufacturers, shed jobs.Payroll operator ADP reports that private sector employment increased by 22,000 jobs in January, down from 37,000 in December.Professional and business services companies lost 57,000 jobs in the month, while manufacturing employment fell by 8,000.

That mostly wiped out a 74,000 increase in headcount at education and health services,ADP says:In a lackluster month for hiring, the education and health services sector was a standout, adding 74,000 jobs,Leading the slowdown was manufacturing, which has lost jobs every month since March 2024, professional and business services, and large employers,Normally, the ADP report sets the scene for the official US jobs report on Friday,However, this month’s non-farm payroll report has been delayed by the latest US government shutdown.

Dutch firm Wolters Kluwer, which provides analytical data services, to the legal industry is also under pressure again today.Its shares fell 3% in morning trade, but are now down just 0.5%, adding to its 12% drop yesterday when Anthropic’s new legal plug-in service hit the software sector.US pharmaceuticals firm Eli Lilly has beaten Wall Street estimates for its fourth-quarter earnings and revenue.The company’s 2026 guidance has also exceeded forecasts, thanks to demand for its weight loss drug Zepbound and diabetes treatment Mounjaro (one factor behind Novo Nordisk’s struggles – see earlier post).

Max Stanyard, healthcare and life sciences senior analyst at RSM UK, says:“The significant jump in Eli Lilly’s revenue is driven by growth in sales of its obesity and diabetes medications, which shows no sign of slowing down,The FDA approval of its new oral obesity medication – targeted for April 2026 - combined with broader coverage of existing obesity medications by the US Medicare and Medicaid plans, will propel future growth,The Japanese yen has been weakening again today, ahead of the snap election scheduled for 8 February,Investors are anticipating that voters will support new prime minister Sanae Takaichi, who is pledging more spending, tax cuts and a faster defence build‑up,Takaichi’s promise to tackle the cost-of-living crisis is appealing to younger voters, who are attracted by promises of tax relief, including raising the income-tax threshold and expanding deductions aimed at boosting take-home pay.

The yen was 0.68% lower at 156.80 per dollar earlier today, its weakest since 23 January.In the leisure world, Dragons’ Den star Peter Jones has bought American Golf, the UK’s largest specialist golf retailer.Jones and his investment group acquired American Golf – which despite its name was founded in a garden shed in Warrington in 1978 – earlier today, from private equity firm Endless.

American Golf employs more than 1,000 people, and operates more than 80 bricks-and-mortar stores in the UK and Ireland as well as selling golf equipment online,Jones says:“Golf has always been a personal passion of mine, so acquiring American Golf feels especially meaningful,It’s a brand that truly understands golfers — from beginners to seasoned players — and has played an important role in the UK golf community for decades,”Nigel Oddy, CEO of American Golf, says the deal will help the company accelerate its growth strategy,He was brought in by Endless to run American Golf after it collapsed into administration under its previous owner in 2018.

Oddy’s turnaround plan included selling off its six golf courses, and focusing on its stores – see here for more:Elswhere in the markets, gold is back over the $5,000 an ounce level.That’s the latest move in a few very volatile days in the precious metals market.Gold first rose over the $5k mark at the start of last week, as it rocketed to a record high near $5,600/oz – before tumbling on Friday, and then hitting a low of $4,403/oz two days ago.After being driven higher by speculative buying, gold may now be acting as a safe-haven again.Raffi Boyadjian, Lead Market Analyst at Trading Point, says:Yesterday’s tech rout boosted gold, which surged 5.

9% to just under $5,000, and the precious metal is extending its gains today, crossing back above that crucial threshold,Gold’s more than 20% crash from last week’s record high to Monday’s intra-day low appears to have been a short-lived panic, as the price has already retraced more than 50% of that drop,Geopolitical tensions are likely supporting the rebound amid the elevated risk of a military escalation between the United States and Iran,The US military said on Tuesday its fighter jets shot down an Iranian drone headed towards the Abraham Lincoln aircraft carrier, which was sent to the Arabian Sea on President Trump’s orders,Charu Chanana, chief investment strategist at Saxo, has identified a few product announcements which explain why AI fears are hitting the software sector now.

Anthropic’s new legal productivity tool is designed for in-house legal teams, aiming to automate tasks like contract review, NDA triage, compliance workflows, legal briefings, and templated responses (with human oversight).Claude Cowork is Anthropic’s more “agent-like” desktop assistant, built to work across files and common workplace tasks — and now extended with specialised plug-ins that can execute workflows in areas like legal, sales, marketing, and analysis.Google’s Project Genie is an experimental tool that turns a text prompt or image into a short, interactive world you can explore and remix in real time — a vivid example of how generative AI is expanding from text to richer, more complex outputs.Chanana says this is leading investore to be more selective in their stock picks, as they try to identify where “the real bottlenecks, moats, and profit pools are likely to sit as AI moves from promise to practice”.Yesterday’s Wall Street selloff has squeezed the software sector’s price-to-earnings ratio (a key measure of stock valuations):Software's forward 12m P/E has compressed from 33.

1x to 23.2x, multiple contraction of 30%.Valuations are now approaching the 2022 and Covid lows...

pic,twitter,com/XAaBPxfpdCBritain’s FTSE 100 share index has now climbed over the 10,400 point mark for the first time, as the rotation out of software stocks and into other sectors continues,The blue-chip shares index has touched 10,419 points, a new intraday high, up 104 points or 1%,Beazley (+8.

4%) are sill the top riser, following Zurich’s improved takeover proposal, followed by services firm DCC (+8.4%), and specialty chemicals group Croda (+4.3%).Inflation across the eurozone has fallen below the European Central Bank’s 2% target.Statistics body eurostat estimates that annual inflation in the euro area fell to 1.

7% in January, down from 2% in December, thanks to a fall in energy prices,Eurostat says:Services is expected to have the highest annual rate in January (3,2%, compared with 3,4% in December), followed by food, alcohol & tobacco (2,7%, compared with 2.

5% in December), non-energy industrial goods (0.4%, compared with 0.3% in December) and energy (-4.1%, compared with -1.9% in December)