Oil Surges as Gulf Tensions Weigh on S&P 500 Futures

Oil prices jumped after renewed US-Iran attacks and uncertainty over shipping through the Strait of Hormuz, lifting the US dollar and pressuring equity markets. S&P 500 and Nasdaq futures moved lower, while European markets, including the FTSE 100, were set for a weaker open. The dollar strengthened against the yen as investors sought safe-haven assets, while sterling edged lower ahead of a significant week in UK politics. AI-related stocks remained under scrutiny as investors reassessed valuations.

Equities

The FTSE 100 closed 0.2% higher on Friday at 10,497.3, while the FTSE 250 gained 0.6%. Despite the stronger finish to the week, the blue-chip index ended the week down 1.7% and the FTSE 250 lost 0.7%.

Vodafone closed 12.6% higher on Friday, leading the FTSE 100 after UAE telecoms group e& agreed to sell its stake in the company to the family investment vehicle of French billionaire Xavier Niel in a deal worth almost $6 billion. The transaction makes Niel Vodafone's largest shareholder and fuelled strong buying across the telecoms sector.

AstraZeneca closed 3.9% lower on Friday after falling more than 6% in the previous session, making healthcare one of the weakest sectors in London trading. St. James's Place also came under pressure, ending the session 8.6% lower following reports that one of its largest partner firms, Sovereign Wealth, is in talks to join a Swedish wealth management group.

In the FTSE 250, easyJet surged 14.3% after agreeing in principle to a £5.7 billion takeover proposal from Apollo Global. Recruitment firm Hays jumped 19.6% after saying annual operating profit is expected to reach the top end of market forecasts following successful cost reductions and improved consultant productivity.

In the US, the S&P 500 closed 0.42% higher on Friday at 7,575.39, finishing just below its record closing high. The Nasdaq added 0.29% and the Dow Jones Industrial Average also rose 0.29%, with investors turning their attention to second-quarter earnings reports due this week.

Technology shares remained in focus after South Korean memory chip maker SK Hynix finished its Nasdaq debut 13% above its $149 offering price, closing at $170 after raising more than $26 billion through its US listing. The debut reinforced confidence in companies linked to artificial intelligence infrastructure ahead of the earnings season.

Meta Platforms climbed 6% on Friday to its highest level since April, extending gains in large technology stocks. Moderna fell almost 11%, marking its weakest daily performance in more than a year, while Delta Air Lines slipped 1.8% despite forecasting third-quarter profit above market expectations. Analysts currently expect S&P 500 companies to deliver earnings growth of around 24% from a year earlier, led by the technology sector.

Forex & Commodities

The US dollar strengthened early on Monday as renewed military action between the US and Iran increased demand for the currency and reinforced expectations that higher energy costs could keep inflation elevated. The dollar index rose to 101.1, while sterling weakened to $1.337 and the euro slipped to $1.140. The Japanese yen also lost ground, with the dollar trading at ¥162.1, while the Australian and New Zealand dollars both moved lower.

Gold fell sharply despite the worsening geopolitical situation. Spot gold dropped to $4,060 per ounce as the stronger US dollar, rising Treasury yields and growing expectations of further US interest rate increases outweighed its traditional appeal as a safe-haven asset. Silver declined to $58.29 per ounce, while platinum traded at $1,602 and palladium fell to $1,251.

Oil prices climbed early on Monday after fresh US and Iranian military strikes renewed concerns over shipping through the Strait of Hormuz. Brent crude rose to $79.11 per barrel, while US West Texas Intermediate reached $74.36. Although US President Donald Trump said commercial traffic remained open, Iran maintained that it had closed the strategic waterway, raising concerns over global energy supplies after vessel traffic fell to its lowest level in five weeks.