FTSE 100 expected to decline amid US inflation concerns

The FTSE 100 is expected to open lower as investors react to firmer US inflation data. US personal consumption expenditures showed headline inflation holding at 3.7% year-on-year in July, slightly exceeding expectations. This has reinforced market views that the Federal Reserve may consider further policy tightening, with the US two-year Treasury yield moving toward 4.22%.

Market attention is focused on Federal Reserve Chair Kevin Warsh’s upcoming address at Jackson Hole, which is expected to provide clarity on the central bank's stance regarding persistent inflation and potential interest rate increases.

Despite the downward pressure on the UK index, Nvidia has provided a positive counterweight to global sentiment. The chipmaker issued an optimistic outlook for artificial intelligence demand, projecting revenue growth of 70% in financial 2028. Following this announcement, Nvidia shares rose 4.7% in after-hours trading.