Brent slides on Saudi supply hopes, lifting S&P futures

Summary

Brent gave up early gains and fell back, as expectations that Saudi Arabia would quickly restore flows through its East-West pipeline outweighed the Houthi attack on the kingdom's capital. The retreat in crude lifted equities, with S&P 500 and Nasdaq futures firmer and European futures nudging higher. The euro held around $1.1484, while the dollar drifted below 157.00 yen on concerns the Bank of Japan could intervene in thin holiday liquidity after Friday's rate checks.

Equities

The FTSE 100 fell 1.4% on Friday, closing at 10,659.13 after pulling back from a more than one-week high. The index still recorded a small weekly gain, while the FTSE 250 dropped 0.6% on Friday but posted its strongest weekly rise since early August.

Financial stocks led the declines in London on Friday, with the banking sector down 2.1%. Lloyds fell 2.9% and HSBC lost 1.6%, while telecom stocks dropped 4.8%.

Airtel Africa tumbled 11.3% on Friday after news that its Airtel Money business was considering reducing the size of its planned London IPO. Softcat fell nearly 4% on the FTSE 250 after agreeing to acquire US-based GDT at an enterprise value of $1.05 billion.

Construction and materials shares moved in the opposite direction on Friday, rising 1.3%, with Galliford Try helping to lift the sector. The moves followed a busy week in which the Bank of England held interest rates steady and paused UK government bond sales for six months.

In the US, the S&P 500 closed 0.17% higher on Friday at 7,650.50, while the Nasdaq Composite gained 0.40% to 26,522.55. The Dow Jones Industrial Average slipped 0.18% to 51,682.64, ending a volatile week with its largest weekly percentage decline since March.

Technology stocks were the strongest S&P 500 sector on Friday. Cryptocurrency-linked shares also jumped as bitcoin rose 5.9%, with Coinbase, Strategy and Robinhood climbing between 9.1% and 16.4%.

Xenon Pharmaceuticals plunged 30.7% on Friday after temporarily pausing enrolment in clinical studies of its experimental treatment for major and bipolar depression following reports of side effects. Berkshire Hathaway edged lower after announcing that Warren Buffett will step down as chairman and become chairman emeritus, nine months after handing the chief executive role to Greg Abel.

Forex & Commodities

The US dollar held firm early on Monday after gaining last week following the Federal Reserve’s latest interest-rate increase. The dollar index stood at 100.2, while sterling traded at $1.339 and the euro was little changed at $1.148.

The Japanese yen steadied at 156.9 per US dollar early on Monday after weakening last week. The Bank of Japan raised its policy rate to a 31-year high of 1.25% on Friday, but the yen came under pressure after two policymakers dissented and the central bank stopped short of giving explicitly hawkish guidance.

Japanese officials subsequently conducted rate checks, putting traders on alert for possible currency intervention. The yen had strengthened to a seven-month high earlier in September, while speculative net-long positions reached $9.7 billion in the week to September 15, their highest since July 2025.

The Federal Reserve raised its benchmark rate by 25 basis points to 3.75%–4.00% on Wednesday and indicated that further increases could follow. By Monday, markets were pricing a 55% chance of another increase at the Fed’s October meeting, compared with 42.5% a week earlier. The European Central Bank has also raised rates this month and warned that further tightening may be needed.

Spot gold rose 1.2% to $4,390 an ounce on Friday, reaching its highest level in a week and taking its weekly gain to 1.0%. The move came as oil prices eased and investors unwound short positions that had been built ahead of the Fed’s rate increase, although a stronger US dollar limited support for bullion.

Oil fell to its lowest level since September 10 early on Monday as hopes grew that diplomatic efforts could help de-escalate the US-Iran war. Brent crude dropped 2.08% to $101.7 a barrel, while West Texas Intermediate fell 2.14% to $98.15, moving below $100.

Saudi oil exports have meanwhile recovered to more than 4 million barrels per day so far in September, after falling to 2.4 million in August. Saudi Aramco increased shipments through the Strait of Hormuz after attacks on its East-West pipeline disrupted exports through Yanbu.