The FTSE 100 traded lower on Wednesday as investors monitored further military exchanges involving Iran and the United States and developments affecting shipping in the Strait of Hormuz.

The UK benchmark was down 0.30% as of 03:18 ET (07:18 GMT), while Germany’s DAX declined 0.22% and France’s CAC 40 fell 0.16%. Sterling was 0.12% lower against the U.S. dollar at $1.3501.

Jefferies noted that risk assets had already weakened on Tuesday, when the S&P 500 declined 0.7% and the Eurostoxx fell 0.8%. The 10-year U.S. Treasury yield increased five basis points to above 4.80%.

Iran Reports Strikes on U.S. Bases

Iran’s Islamic Revolutionary Guard Corps said it had targeted the al-Dhafra and al-Minhad U.S. bases in the United Arab Emirates with drones. The claim had not been confirmed by UAE authorities.

Kuwait’s KUNA news agency reported that a drone strike caused a residential fire in Kuwait City. The fire was extinguished and no casualties were reported.

Iran also said it had targeted U.S. bases in Erbil, Iraq, while Bahrain issued a public alert.

Two tankers, the Sidr and Senegal Prosperity, were reportedly struck by projectiles in the Strait of Hormuz. ING analysts Warren Patterson and Ewa Manthey noted that the incidents followed strikes over the weekend and additional U.S. attacks on Iranian targets overnight.

CENTCOM said a series of U.S. strikes on Tuesday targeted IRGC “air defense sites, radar systems… and communications sites.”

Iran said five people were killed and around 50 injured in strikes at a wedding near Sirik. Iranian foreign ministry spokesman Esmaeil Baqaei described the incident as part of a “chain of atrocities.”

Iran separately said 11 people were killed in strikes in Khuzestan on Wednesday.

Jordan Disputes Iranian Claim of Direct Hit

Iran said it had fired missiles at a U.S. base in Jordan and claimed a direct hit.

Jordan’s military provided a different account, saying 13 missiles were launched and 10 were intercepted, with no casualties reported.

U.S. President Donald Trump also issued a warning to Iran on Truth Social, saying the country faced a response after which “there will be very little left of the Islamic Republic,” while adding that the United States has “almost total control” of Hormuz and that Tehran’s economy is “totally collapsing.”

The comments were contained in a single Truth Social post subsequently reported by ANI and CNN.

Jefferies Continues to See September Fed Hike as Unlikely

Jefferies analyst Mohit Kumar said the bank continues to expect no Federal Reserve interest-rate increase in September, citing its expectation for benign inflation data.

However, Jefferies said the threshold for a rate increase had declined following recent comments from Federal Reserve Governor Kevin Warsh concerning credibility.

The bank sees December as the earliest potential timing for an increase, depending on developments in the conflict and oil prices.

Brent Crude Trades at $95 a Barrel

Brent crude increased 0.37% to $95 a barrel, while U.S. crude rose 0.06% to $90.27.

Spot gold was down 0.02% at $4,327.33 an ounce, while gold futures declined 0.52% to $4,374.09.

UK Corporate Updates

BP (LSE:BP.) appointed Ian Tyler as chairman of the board. Amanda Blanc will step down as an independent director once a successor has been appointed.

Ryanair (NASDAQ:RYAAY) lowered its fiscal 2027 passenger target to 214 million from 216 million, citing elevated unhedged oil prices. The airline also warned of higher short-haul fares.