Oil Stocks Spur FTSE 100 Rebound Ahead of Trump Deadline

Oil’s sharp rise above $110 is weighing on the S&P 500 as investors await President Trump’s Iran deadline. US futures edged lower while European markets signaled a muted open, reflecting uncertainty over the Strait of Hormuz. The dollar held firm and the yen hovered near intervention-sensitive levels. Risk sentiment remains fragile with traders largely sidelined amid escalating geopolitical tensions.

Equities

The FTSE 100 closed higher late last week, rising 0.6% as the UK moved to host international talks aimed at reopening the Strait of Hormuz.

The US President has given Iran until 20:00 ET Tuesday to make a deal, threatening to attack the country’s energy and travel infrastructure.

On Thursday, before the long Easter weekend, energy stocks led gains with oil holding near $110 per barrel, while the mid-cap FTSE 250 slipped slightly. The advance came despite surveys showing weakening UK business confidence and expectations of faster price increases linked to rising energy costs.

Among UK companies, BP and Shell both closed firmly higher on Thursday, tracking the strength in crude prices. In pharmaceuticals, AstraZeneca rose after reporting positive late-stage trial results for its Imfinzi treatment in liver cancer, supporting gains across the sector.

In the United States, the S&P 500 and Nasdaq Composite both closed higher on Monday, extending their winning streaks to four sessions. The Dow Jones Industrial Average also moved higher as investors assessed ongoing discussions around a potential ceasefire between the US and Iran, despite continued threats of escalation.

Soleno Therapeutics surged sharply after agreeing to a $2.9 billion takeover by Neurocrine Biosciences, marking one of the largest moves in US trading on Monday. Cryptocurrency-linked names also advanced, with Coinbase and MicroStrategy both closing higher alongside gains in bitcoin.

Economic data released late on Monday showed the US services sector expanded at a slower pace in March, while input prices rose to their highest level in more than three years.

In the UK, a Bank of England survey indicated firms expect to raise prices more quickly over the coming year, reflecting higher energy costs. Markets are now pricing in more than two additional rate increases from the Bank of England by year-end, highlighting the persistence of inflation pressures.

Forex & Commodities

The US Dollar held near recent highs early this morning as markets counted down to a US deadline for Iran to reopen the Strait of Hormuz.

The euro traded around $1.154 and sterling hovered near $1.323, both slightly above recent lows, while the yen weakened towards 159.8 per dollar, close to levels that previously triggered intervention.

Demand for the dollar remained firm, particularly across Asian markets, with investors reluctant to reduce positions ahead of potential escalation.

Oil prices stayed elevated, with Brent crude holding around $111.5 early today after a sustained rally driven by disruptions to Gulf energy flows. The prolonged closure of the Strait has intensified concerns about supply constraints, keeping crude supported at these levels. The strength in energy markets has reinforced expectations that inflation pressures will persist in the near term.

Spot gold edged lower to approximately $4,638 early this morning, slipping despite ongoing geopolitical tensions. The pullback comes as expectations of tighter monetary policy offset demand for traditional safe-haven assets. Other precious metals also declined, with silver, platinum and palladium all moving lower during the same session.