Americans Head to Polls. Oil Tumbles On Iran-Qatar Talks

Oil extended Monday's sharp slide into Tuesday's session, even as a US strike on an Iranian island tempered hopes for a swift end to the conflict, with investors now bracing for today's US midterm elections. The FTSE 100 extended its winning streak to a fourth session, while Wall Street's S&P 500 and Nasdaq slipped on renewed AI-spending worries even as the Dow closed higher. 

Equities 

The FTSE 100 rose for a fourth straight session on Monday, adding 0.3% to close at 10,761 points, as a sharp slide in oil prices lifted broader risk appetite. The midcap FTSE 250 also advanced, with investors turning their attention to Thursday's Bank of England interest rate decision. The index also booked its first monthly gain in three months in October, outperforming Wall Street's S&P 500. 

Energy stocks were among the heaviest casualties of the oil slide, with BP and Ithaca Energy both falling as crude tumbled. FirstGroup rose after agreeing to sell assets to the West Yorkshire Combined Authority for £109 million, while pharmaceutical stocks eased slightly after last week's sharp gains. 

Travel, leisure and construction stocks led the broader market higher, buoyed by the easing of oil-driven inflation worries. Stronger-than-expected UK manufacturing output data for October added to the more upbeat tone ahead of this week's Bank of England meeting. 

Wall Street was mixed on Monday as oil's slide collided with renewed worries about heavy spending on artificial intelligence. The S&P 500 fell 0.5% to 7,541.40 and the Nasdaq dropped 1.1% to 25,164.32, while the Dow Jones Industrial Average rose 0.4% to 51,983.98, supported by gains in consumer-focused stocks. 

Apple fell ahead of its quarterly results, which beat forecasts after the close on strong early demand for the iPhone 18 Pro and price increases that helped offset rising memory-chip costs. Amazon and Tesla both advanced along with the broader risk-on move. 

Oracle fell sharply after regulatory filings showed the cloud group plans to raise $20 billion through a debt and share sale, reviving concerns about debt-funded AI spending. Marvell Technology slid 13% after agreeing to buy optical components maker Lumentum in an all-stock deal worth $115 billion including debt, with Lumentum shares tumbling 18.6% on the terms. 

Intel extended last week's heavy guidance-driven losses, falling further after cutting its revenue outlook and warning it does not expect positive cash flow this year. Palantir dipped ahead of its own results due after the bell, while AMD fell ahead of Tuesday's quarterly report. 

Forex & Commodities 

The dollar eased on Monday as oil's slide and falling Treasury yields reduced demand for the currency as a haven, before steadying in Tuesday's Asian session as a renewed stock-market slump offered some support. The dollar index fell 0.2% on Monday before holding roughly flat near 101.8 on Tuesday, with investors awaiting Wednesday's US Treasury refunding announcement alongside the midterm elections. Separate data on Monday showed US manufacturing activity picking up in October to its strongest pace in over a year. 

Sterling held steady near $1.34 after data showed British manufacturers posted their strongest output growth in more than two years in October. The pound is also looking ahead to Thursday's Bank of England decision, where a quarter-point rate rise is widely expected. 

Gold eased on Tuesday after jumping in the previous session as the drop in oil prices eased inflation concerns, following a slide to a one-year low last week. Silver and platinum also slipped back as the brief rebound faded. 

Oil tumbled sharply on Monday – its steepest one-day drop in months – as continuing talks between Iran and Qatar raised hopes of ending their eight-month war, before steadying in Tuesday's Asian trading. The relief was tempered by confirmation that the US had carried out strikes on an Iranian island in the Strait of Hormuz, underlining that the conflict is not yet resolved. 

Australia's central bank raised its benchmark interest rate by a quarter point to a near two-decade high on Tuesday, a widely expected move that nonetheless weighed on the Australian dollar.