The FTSE 100 advanced 0.3% on Monday, clawing back early declines driven by commodity-linked stocks amid escalating geopolitical tensions and a broad retreat in technology shares.
European benchmarks lagged, with Germany’s DAX down 0.1% and France’s CAC 40 falling 0.4%. The British pound slipped 0.1% against the dollar to 1.3633. Brent crude oil dropped 1.5% to $91.32 per barrel, while WTI fell 1.8% to $85.52. In contrast, gold futures for December rose 0.7% to $4,713, and spot gold gained 1.13% to $4,655.46.
Iran’s Supreme National Security Council Secretary Mohsen Rezaei warned that Tehran could halt oil exports through the Strait of Hormuz, stating that countries supporting U.S. sanctions risk being treated as committing an "act of war." U.S. Treasury Secretary Scott Bessent described the forthcoming financial measures as "the largest financial offensive ever mobilized against an adversary," with officials framing the move as an "economic D-Day."
Iranian Foreign Ministry spokesperson Esmaeil Baghaei reiterated that "any escalation will undoubtedly bring consequences" and claimed past U.S. pressure campaigns had failed. U.S. House Speaker Mike Johnson told Fox News the country was entering a "new phase" in the conflict, with Republican leadership suggesting the party could maintain its House majority even if the dispute extended into midterm elections.
Analysts cautioned that sanctions alone may not resolve the impasse without support from China and Russia, noting such measures often take too long to take effect. Jefferies’ Mohit Kumar highlighted that Iran could maintain short-term pressure on the U.S. while awaiting a potential deal closer to the midterms.
UBS economist Maelle Quillevere characterized UK labor market data as surprisingly resilient, noting a gradual loosening without collapse alongside slowing wage growth and cooling core inflation. However, she added that overall CPI rose due to energy costs, and UBS viewed market pricing for Bank of England rate hikes as "excessively hawkish."
On the FTSE 100, top performers included Weir Group, Airtel Africa, Antofagasta, Anglo American, InterContinental Hotels, IAG, and Diageo. The index’s recovery followed declines in early trading as investors weighed geopolitical risks against domestic economic signals.
