Evidence there that the economy is growing fast enough to fuel inflation and trigger higher interest rates is shaking confidence about corporate earnings.
That, of course, is bad news for the FT-SE 100 because Glaxo, SmithKline, Shell, BP and Zeneca, which have American depository receipts trading in New York, account for more than 20 per cent of the index's total market capitalisation.
"The US plays a key role in the FT-SE 100 Index, especially in pharmaceuticals and the oils," said Job Curtis, an investment manager at Henderson Investment Management. "The US will be a dominant feature in our market."
Last week, the index slipped 1.8 per cent amid concern interest rates are poised to rise on both sides of the Atlantic. Unease ahead of the 1 May general election also held shares back - as it will again this week.
"We're in the election period and people have no reason to buy this close to it," Mr Curtis said. "We'll see rates rise after the election, regardless of who wins, though it seems that Labour will win a majority."
A clutch of company earnings reports may offer some bright spots in the gloom. Petroleum and lubricants company Burmah Castrol will report 1996 earnings on Monday, while food retailer Tesco and building materials provider Tarmac will announce profits on Tuesday.
Smiths Industries, an aerospace electronics maker, will announce first- half earnings on Wednesday, while RMC Group, another building materials company, will report on Thursday.
Investors will also have to digest a series of UK economic figures, including February industrial production and manufacturing production numbers on Wednesday.
The reports are expected to confirm expectations that the UK economy is growing briskly enough to raise the threat of inflation and lead to higher interest rates after the election. Of greater concern to some people is the pace of US economic growth and the timing and size of the next rate rise in the world's largest economy.
"It's debatable whether the [US Federal Reserve] is ahead of the curve," said Philip Isherwood, an investment strategist at Dresdner Kleinwort Benson.
Higher US rates, of course, would mean that the tough time Britain's largest companies have endured recently has only just begun. Copyright: IOS & BloombergReuse content