Oil rises as Hormuz shipping remains restricted

Summary

Asian stocks followed Friday’s Wall Street gains, when the Nasdaq closed at a record high and completed a 5% weekly rise. Oil moved higher on Monday, with Brent reaching $84.38 a barrel as shipping through the Strait of Hormuz remained severely restricted despite Iran saying a deal with Oman on new shipping lanes was nearing completion. US stock futures edged lower, while the US dollar remained firmer following Friday’s unexpectedly weak employment report.

Equities

The FTSE 100 closed 0.3% higher at 10,901.09 on Friday, completing a fourth consecutive week of gains. The FTSE 250 rose 0.7% to 24,854.86, with the mid-cap index recording its strongest weekly advance since mid-April.

Precious metals miners were some of the strongest UK performers on Friday as gold prices climbed. Fresnillo, Hochschild and Endeavour Mining shares rose between 4% and 6%, while weaker crude prices weighed on the major oil companies, leaving Shell down 1.1% and BP 0.5% lower at the close.

Oxford Biomedica fell 14.6% on Friday after the cell and gene therapy company cut its 2026 revenue forecast. The company blamed operational delays at a US facility and the postponement of some client orders, while engineering group Goodwin jumped 9.8% after announcing that it was considering selling parts of its mechanical engineering business as part of a wider strategic review.

US stocks also finished higher on Friday. The S&P 500 rose 0.62% to a record 7,757.64, the Nasdaq gained 1.30% to 26,690.62 and the Dow Jones added 0.28% to 54,036.93. Over the week, the Nasdaq climbed 5.19%, the S&P 500 gained 3.58% and the Dow rose 2.96%, giving all three indices their strongest weekly gains since April.

Atlassian surged 35.3% on Friday, its largest one-day percentage gain on record, after the software company beat quarterly profit and revenue expectations and forecast quarterly revenue above analysts’ estimates. Microchip Technology jumped 13.9% after also issuing a stronger-than-expected revenue forecast.

Airbnb climbed 17.4% on Friday after second-quarter revenue exceeded expectations. Trade Desk moved sharply in the opposite direction, falling 21.9% after the advertising technology company forecast third-quarter revenue below analysts’ expectations, while SpaceX shares jumped 15.8% following the expiry of the first of several post-IPO share lock-up restrictions.

Forex & Commodities

The US dollar edged higher early this morning, with the dollar index rising to 99.70 after touching its lowest level since early June. The euro slipped to $1.155, although it remained close to its strongest level since mid-June, while the British pound held steady at $1.349 and remained just below the five-week high reached recently. The dollar’s recovery remained limited after falling over the previous week.

The Japanese yen weakened to 158.3 per US dollar early on Monday, continuing to give back some of the gains made following coordinated intervention by Japan and the US earlier this month. The currency nevertheless remained considerably stronger than the multi-decade low of around 164 per dollar reached in late July. The Australian dollar slipped to $0.7062 and the New Zealand dollar fell to $0.5887, while the Chinese yuan held at 6.744, close to its strongest level in three and a half years.

Spot gold was little changed at $4,347 an ounce early this morning after reaching a seven-week high on Friday following weaker US employment figures. The data reduced expectations for a Federal Reserve interest rate increase in September, providing support for gold after its recent gains. Markets are now pricing the probability of a September increase at around 44%, compared with 67% a week earlier.

Oil prices were broadly steady early on Monday after giving up gains of more than 1% earlier in the session. Brent crude traded at $83.54 a barrel and US West Texas Intermediate at $78.03, after both benchmarks fell more than 7% last week as expectations increased that the Strait of Hormuz could reopen. Iran said its agreement with Oman over new shipping lanes was in its final stages, but maintained that the waterway would remain closed until the US met several additional conditions, including compensation for US attacks on Iran.