Markets boosted ahead of central bank decisions as Apple in talks with Alphabet over potential Gemini AI tie-up

“Tech stocks helped bolster nerves ahead of another data fuelled week when central bankers will once again take centre stage and we’ll all jump down the interest rate rabbit hole,” says Danni Hewson, Head of Financial Analysis at AJ Bell.

“How far off is the first cut? Probably further than we thought it was going to be at the start of the year. The Bank of England fired the starting gun on rate hikes and there is now an argument to be made that the turgid state of the UK economy makes it increasingly likely that they may be pushed to act first once again.

“As ever it’s a delicate balancing act because jumping out too far ahead of the pack could devalue the pound enough to end up importing a bit of the inflation that Andrew Bailey and his colleagues have worked so hard to shut down.

“The latest UK inflation print due on Wednesday could add to the pressure but no one’s betting on it making a real impact on this month’s decision.”

Apple / Alphabet

“For months Apple’s been under intense scrutiny for not revealing its plans to ride the AI wave. It’s one of only two so-called Magnificent Seven stocks that have failed to make gains since the start of the year, but the news that it’s considering partnering with Alphabet to build its Gemini AI into the next generation of iPhones has sent investors hearts aflutter.

“Apple’s long been promising it had an AI ace up its sleeve and whilst this might not be the most profound hand it could have dealt, it does make a degree of sense and would help both Apple and Alphabet square up to Microsoft’s early AI dominance.

“Far from being just a tool to phone home with, Apple’s handset put the world in the palm of users’ hands. But we’ve got used to carrying around maps, movies, music and marketplaces and we want more.

“AI promises to deliver that more, even if it’s not quite clear what that will mean for our daily lives beyond making it easier for companies to sell us their latest products.”

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