Category: Market Summary

European stocks moved higher on Tuesday, recovering from recent multi-week lows as investors reacted with relief after Washington’s heavily promoted “economic D-Day” against Iran stopped short of triggering immediate disruption to global energy supplies.

The pan-European Stoxx Europe 600 Index gained 0.4%, reversing some of the weakness seen in recent sessions. Germany’s DAX and France’s CAC 40 both advanced by more than 0.4%, while London’s FTSE 100 edged 0.1% higher.

The rebound followed several volatile weeks for global markets, during which investors have had to contend with rising energy costs, elevated longer-term bond yields and increasingly confrontational rhetoric surrounding the Middle East.

Markets had entered Monday expecting potentially significant measures after the Trump administration described its forthcoming package against Iran as an “economic D-Day.” Washington had also threatened secondary sanctions against foreign countries maintaining commercial relationships with Tehran.

The measures ultimately proved less disruptive than investors had feared, largely reinforcing the existing US sanctions stance rather than introducing immediate and unexpected restrictions on international crude oil flows.

Oil Prices Stabilise as Supply Concerns Ease

Energy markets responded by retreating from recent multi-week highs. Brent crude futures had fallen more than 2% overnight as geopolitical concerns eased before trading broadly unchanged on Tuesday at around $91.50 a barrel.

The stabilisation in crude prices provided some relief for European equities by reducing concerns that another sharp increase in energy costs could feed into inflation and raise expenses across industrial supply chains.

Lower energy prices also helped improve broader risk sentiment after recent volatility had pushed investors towards more defensive positioning.

German Q2 GDP Beats Forecasts on Export Momentum

European markets received further support from stronger-than-expected economic data from Germany, where revised figures showed that Europe’s largest economy expanded more rapidly than previously estimated during the second quarter.

German gross domestic product increased by 1.0% year-on-year, exceeding expectations for growth of 0.9% and accelerating from 0.7% in the previous quarter.

On a quarter-on-quarter basis, Destatis reported growth of 0.3%, above the preliminary estimate of 0.2%.

Exports provided an important contribution to the stronger performance, rising 2.0% from the previous quarter. Growth was supported by shipments of chemicals, electronics and transport equipment.

The figures offered some reassurance that Germany continues to maintain underlying economic momentum despite elevated borrowing costs and relatively subdued domestic consumer demand.

Treasury Cash Plan Helps Global Bond Yields Retreat

Equity markets also benefited from a pullback in global government bond yields following reports of a potential change in US Treasury financing strategy.

Benchmark Treasury yields eased from recent highs after reports suggested the US Treasury Department could use cash held in its Treasury General Account to finance an expanded debt buyback programme.

Using existing cash reserves rather than increasing the issuance of short-term Treasury bills could reduce the amount of new government debt that investors are required to absorb.

Germany’s 10-year Bund yield subsequently moved back towards 3.23%, easing some of the valuation pressure that higher borrowing costs had placed on European equities.

Investor attention is now shifting towards Nvidia Corp.’s closely watched earnings announcement on Wednesday and Federal Reserve Chair Kevin Warsh’s address at Jackson Hole on Friday.

Chesnara and Vistry Lead UK Corporate Movers

Among individual UK stocks, Chesnara (LSE:CSN) gained nearly 5% after reporting strong capital generation.

Vistry (LSE:VTY) climbed 10% after the housebuilder secured £350 million of government funding under the Social and Affordable Homes Programme, providing support for the delivery of new housing.

The combination of easing geopolitical concerns, stronger German economic data and lower sovereign bond yields helped restore some confidence to European markets after several difficult sessions.

UK stocks moved modestly higher on Tuesday as Bitcoin extended its rally to a more than three-month high, helping support broader investor appetite for risk despite continued geopolitical tensions surrounding Iran.

The FTSE 100 gained 0.15% as of 03:25 ET (07:25 GMT), while other major European markets also advanced. Germany’s DAX rose 0.24% and France’s CAC 40 added 0.26%.

Sterling was little changed against the US dollar, trading 0.03% higher at $1.3640.

Bitcoin Climbs Above $80,000

Bitcoin (COIN:BTCUSD) moved above the $80,000 mark, trading around $80,323 after reaching $81,237.94 during Asian trading. That represented its strongest level since mid-May.

The cryptocurrency has gained approximately 28% during August and is on course for its strongest monthly performance since November 2024.

Recent momentum has been supported by a softer US dollar following Treasury Secretary Scott Bessent’s plans for Treasury bond buybacks, which helped renew buying interest across cryptocurrency markets.

Bitcoin has also risen around 16% since US President Donald Trump called on Congress last week to approve legislation providing greater regulatory clarity for cryptocurrencies.

Iran Tensions Keep Geopolitical Risks Elevated

The stronger tone across risk assets came despite continued uncertainty surrounding the confrontation between Washington and Tehran.

US War Secretary Pete Hegseth said on Monday that Washington was “by no means” ruling out military action against Iran. He told reporters that “if we need to use kinetic strikes, we’ll use them,” while indicating that economic pressure remained the preferred approach.

His comments followed further warnings from Bessent as the US intensified its sanctions campaign against Tehran.

Bessent said “no one is above the reach of US sanctions,” raising the possibility that Chinese banks involved in purchases of Iranian oil could face measures. The US has also announced additional sectoral sanctions and an “Operation Economic Outcast” campaign, with Bessent warning that “the clock just started ticking.”

Iranian official Mohsen Rezaei responded by warning that Tehran could halt all Gulf oil exports if the “economic war” continued.

Geopolitical tensions have remained high since US and Israeli strikes reportedly killed Iran’s Supreme Leader on February 28. Iran subsequently retaliated and partially restricted traffic through the Strait of Hormuz. An April ceasefire reduced the intensity of the conflict, although periodic flare-ups have continued.

Oil Prices Fall Despite Middle East Risks

Energy prices moved lower despite the continuing geopolitical uncertainty. Brent crude fell 0.72% to $89.89 a barrel, while WTI declined 0.74% to $89.91.

Precious metals were also slightly weaker. Gold futures slipped 0.016% to $4,697.36, while spot gold declined 0.22% to $4,641.30.

UK Corporate Updates

Melrose (LSE:MRO) said GKN Aerospace is targeting September 28 for the restoration of full operations at its Garden Grove facility. The company has also launched a claims programme worth up to $100 million, while the Orange County District Attorney’s Office has decided not to pursue criminal charges relating to the incident.

Elsewhere, easyJet (LSE:EZJ) and Apollo (NYSE:APO) have extended the deadline for publishing the scheme document connected with their proposed transaction to October 15. The additional time will allow discussions with relevant aviation regulators to continue as the deal progresses through the approval process.

U.S. equity futures were little changed on Monday, pointing to a subdued start on Wall Street as investors remained cautious ahead of Nvidia’s (NASDAQ:NVDA) quarterly earnings and the Jackson Hole economic symposium.

Stocks recovered on Friday following the previous session’s sell-off, although the rebound was not enough to prevent the major indices from recording sizeable weekly declines.

Treasury Buyback Plans Ease Pressure on Bond Yields

Futures initially suggested a weaker opening before improving after CNBC reported further details about the U.S. Treasury Department’s plans to increase purchases of longer-dated government debt.

According to CNBC, citing two senior Treasury officials, the department could draw on its General Account, which holds close to $1 trillion, to help finance a planned doubling of its debt buyback programme.

The report pushed Treasury yields lower, with the benchmark 10-year yield retreating after two sessions of significant increases driven partly by concerns surrounding the U.S. government’s debt burden.

Lower yields provided some relief for equities, but investors appeared unwilling to take aggressive positions ahead of this week’s major market catalysts.

Nvidia Earnings Could Set the Tone for Technology Stocks

Nvidia’s (NASDAQ:NVDA) quarterly report is expected to command significant attention as investors assess whether the artificial intelligence boom can continue supporting earnings growth and elevated technology-sector valuations.

Monetary policy will also move into focus when Federal Reserve Chair Kevin Warsh delivers his keynote address at the Jackson Hole symposium on Friday.

“[Fed Chair Kevin] Warsh is scheduled to deliver keynote remarks on Friday, and markets will be looking for greater clarity on both his assessment of inflation and the broader “regime change” he has advocated at the Fed,” said Daniela Hathorn, Senior Market Analyst at Capital.com.

She added, “He has been reluctant to provide conventional forward guidance, meaning the speech may focus more heavily on the Fed’s reaction function and longer-term philosophy than explicitly signaling what policymakers will do in September.”

Investors will also receive closely watched U.S. consumer inflation data on Wednesday. With few major economic releases before then, trading could remain relatively restrained.

Dow Leads Friday’s Wall Street Recovery

Wall Street rebounded strongly on Friday after Thursday’s decline, with all three major indices ending the session higher.

The Dow advanced 517.80 points, or 1%, to 53,277.01. The Nasdaq gained 113.29 points, or 0.4%, to 26,180.45, while the S&P 500 rose 33.21 points, or 0.4%, to 7,674.37.

Even with Friday’s recovery, the Nasdaq finished the week down 2.1%, while the S&P 500 lost 1.4% and the Dow declined 0.9%.

Some of the rebound appeared to come from investors buying shares following Thursday’s sharp retreat, when rising bond yields and an extended rally in crude oil weighed on risk appetite.

Middle East Tensions Keep Oil Risks in Focus

U.S. crude futures were broadly unchanged after rising more than 6% over the week, with uncertainty surrounding the conflict in the Middle East continuing to support energy prices.

Concerns have increased as the Trump administration shifts towards more aggressive economic measures against Iran rather than further major U.S. military operations, raising the possibility that the confrontation could continue for an extended period.

A prolonged crisis could maintain upward pressure on energy prices and complicate the outlook for inflation and monetary policy.

“Next week’s results from Nvidia could put some of the focus back on corporate earnings but, as we head towards the autumn, a chill has started to descend for markets,” said Dan Coatsworth, head of markets at AJ Bell.

He added, “Investors will be looking for a comfort blanket when Federal Reserve chair Kevin Warsh addresses the Jackson Hole meeting at the end of this month.”

Gold and Brokerage Shares Outperform

Brokerage stocks were among Friday’s strongest performers, with the NYSE Arca Broker/Dealer Index climbing 3.7% to a record closing level.

Gold-related shares also benefited from a sharp increase in bullion prices, lifting the NYSE Arca Gold Bugs Index by 2.5% to its highest close in four months.

Airline, healthcare and pharmaceutical stocks also recorded substantial gains, while utility shares moved notably lower.

European equities traded broadly flat on Monday as investors held back from making major moves ahead of details on what Washington has described as its toughest sanctions campaign yet against Iran and countries that continue to trade with Tehran.

Geopolitical developments are sharing investors’ attention with a busy week of economic and corporate events. Nvidia (NASDAQ:NVDA) is due to report earnings, while upcoming U.S. inflation figures and Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole could provide further direction for global markets.

Major European Indices Trade in Narrow Ranges

Price action across the region remained subdued, with the major European benchmarks showing only modest changes.

France’s CAC 40 slipped 0.2%, while Germany’s DAX hovered just above the flat line. In London, the FTSE 100 gained around 0.1%.

The limited moves reflected investor caution as markets waited to assess the scope of the expected U.S. sanctions and their potential implications for energy markets, inflation and the wider economic outlook.

GSK Gains After Japanese Hepatitis B Approval

Among individual stocks, GSK (LSE:GSK) moved modestly higher in London after securing the first global approval in Japan for its experimental treatment for chronic hepatitis B.

The regulatory milestone provided support for the pharmaceutical group’s shares as investors assessed the potential commercial importance of the treatment.

Elsewhere, French banking group BNP Paribas (EU:BNP) traded lower after confirming that it intends to proceed with an appeal related to the Sudan litigation.

Skanska Advances on Prague Data Centre Contract

Swedish construction group Skanska (TG:SKNB) moved higher after securing a contract from CRA Prague Gateway DC to construct a new data centre on the outskirts of Prague in Czechia.

The contract provided a company-specific catalyst for Skanska shares during an otherwise quiet European session.

With European markets showing little overall direction, attention is likely to remain centred on the forthcoming U.S. sanctions against Iran, Nvidia’s results, inflation data and Warsh’s Jackson Hole remarks for potential catalysts later in the week.

FTSE 100 opens flat as Iran sanctions remain in focus, while Georgina Energy raises funds, MSI wins a NATO contract and Brent crude falls.

Market Overview

The FTSE 100 opened broadly unchanged at 10,816.33, down 0.002 per cent from its previous close, as investors awaited tougher US sanctions on Iran and monitored weakness across Asian technology shares. The Euronext 100 slipped 0.01 per cent to 1,938.70, while Germany’s DAX fell 0.26 per cent to 26,067.65. Overnight in the US, the Nasdaq closed higher at 26,180.46 and the S&P 500 advanced to 7,674.37, with attention now turning towards Nvidia earnings and Federal Reserve commentary from Jackson Hole.

Commodity markets reflected continued uncertainty around the US-Iran conflict, with Brent crude falling as investors awaited details of further US sanctions despite ongoing supply disruption through the Strait of Hormuz. Copper and natural gas also moved lower, while gold gained. Bitcoin unchanged against sterling. The Swiss franc and Japanese yen strengthened marginally versus the pound, while the US and Australian dollars weakened and the euro was broadly unchanged.

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Market Numbers

FTSE 100: Down (-0.002%), 10,816.33
Euronext 100: Down (-0.01%), 1,938.70
DAX: Down (-0.26%), 26,067.65
NASDAQ: Up, 26,180.46
S&P 500: Up, 7,674.37

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In the Headlines

Fundraise – Georgina Energy (LSE:GEX)
Georgina Energy has raised £1.25 million through an equity placing, with most of the proceeds earmarked for its Hussar drilling programme and the remainder providing additional working capital. The funding supports progress at Hussar, although the issuance of new shares will dilute existing shareholders.

NATO Contract – MS International (LSE:MSI)
MS International has secured a €19.4 million contract through its defence subsidiary for three advanced naval gun systems for a NATO member country. The order strengthens the group’s defence backlog and provides additional medium-term revenue visibility, with the systems incorporating counter-uncrewed aerial capabilities.

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Currencies (vs GBP)

USD: Down (-0.01%), $1.3654
CHF: Up (+0.01%), Fr.1.0931
EUR: Unchanged (0.00%), €1.1688
JPY: Up (+0.02%), ¥216.924
AUD: Down (0.00%), $1.9039
Bitcoin (BTC/GBP): Unchanged, £56,715.58

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Commodities

Copper: Down
Gold: Up
Brent Crude: Down
Natural Gas: Down

U.S. stock futures remained on the back foot on Monday as investors prepared for a potentially market-moving week dominated by Nvidia’s (NASDAQ:NVDA) earnings, escalating tensions between the United States and Iran, and Federal Reserve Chair Kevin Warsh’s upcoming Jackson Hole speech.

The combination of uncertainty around artificial intelligence valuations, volatile energy prices and the outlook for U.S. interest rates kept risk appetite subdued.

Nvidia Earnings Loom Over Technology Stocks

U.S. equity futures moved lower during European trading ahead of Nvidia’s quarterly results on Wednesday.

Nasdaq 100 futures fell 0.6%, while S&P 500 futures declined 0.2%.

Nvidia’s report will provide an important indication of whether the rapid expansion of AI-related spending remains strong enough to support elevated technology-sector valuations.

Investors will pay particular attention to demand from large technology companies, which have committed enormous amounts of capital to data centres and other AI infrastructure. Given Nvidia’s central position in the AI ecosystem, its results could have implications well beyond the company’s own shares.

Higher Server Prices Could Challenge AI Investment Boom

Another issue facing the sector is the increasing cost of AI infrastructure. Bloomberg News reported that rising memory chip prices are pushing up the cost of servers containing Nvidia processors.

Some major Nvidia customers could reportedly see prices rise by more than 15% for systems scheduled to ship early next year, including servers equipped with the next-generation Vera Rubin and Grace Blackwell chips.

Server manufacturers supplying data-centre operators including Microsoft, Alphabet’s Google and Oracle have reportedly warned customers about the increases.

The higher prices raise questions about how long technology companies can maintain the current pace of AI investment without putting additional pressure on profitability.

U.S. Intensifies Economic Pressure on Iran

Investors are also preparing for another escalation in tensions between Washington and Tehran as U.S. Treasury Secretary Scott Bessent gets ready to unveil tougher sanctions against Iran.

Bessent has described the campaign as entering the “endgame” and warned that countries continuing to support Tehran risk becoming “global pariahs.”

Iranian officials have threatened to halt oil exports if Washington continues increasing economic pressure.

For financial markets, the principal risk is the potential impact on energy supplies. Further disruption to Iranian exports or shipping through the Strait of Hormuz could drive crude prices higher, adding to inflationary pressures and potentially complicating monetary policy.

Crude Prices Retreat Following Strong Weekly Advance

Oil moved lower on Monday as traders took profits following two consecutive weeks of gains.

Brent crude futures declined 1.5% to $93.16 a barrel, while U.S. West Texas Intermediate fell 1.6% to $85.70.

Both benchmarks gained more than 5% during the previous week as U.S.-Iran peace negotiations stalled and restrictions on oil shipments through the Strait of Hormuz persisted.

Around one-fifth of global oil supplies normally pass through the waterway, making any prolonged disruption particularly significant for international energy markets.

A sustained increase in crude prices could feed through to transportation and fuel costs, adding to inflation and potentially keeping interest rates elevated for longer.

Jackson Hole Could Provide Fresh Clues on Fed Policy

Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole economic symposium on Friday will provide another major focal point for investors.

Markets will listen for indications of how the Fed views persistent inflation, economic resilience and the scope for future interest-rate reductions.

A more hawkish message could create additional pressure for highly valued technology and growth stocks, while indications that monetary policy could become more accommodative may provide support for equities.

With Nvidia, Iran and the Federal Reserve all in focus, investors face several potential catalysts capable of driving volatility across stocks, bonds and commodities this week.

European equities have outpaced their global peers in recent months, and Citi strategists believe the region could become increasingly attractive as a long-term component of global portfolios. However, the bank continues to maintain a Neutral stance on European stocks for now.

The Euro Stoxx 50 has gained 8% over the past three months, compared with a 5% advance for the S&P 500, with European large-cap companies leading the rally. Within the MSCI Europe, cyclical sectors have generally outperformed defensive areas, while Finance, Healthcare, IT and Industrials have also delivered strong performances.

Citi sees three main factors that could sustain the momentum: an improving and resilient macroeconomic and earnings backdrop, continued fiscal support and Europe’s growing potential to act as a hedge against volatility surrounding artificial intelligence.

Economic and Earnings Momentum Improves

European economic surprise indicators have “improved significantly” in recent months after repeatedly falling short of expectations following the outbreak of the US-Iran conflict, according to strategists led by Beata Manthey.

The improvement has also extended to corporate earnings expectations. Citi’s European earnings revision index has moved higher, contrasting with the usual seasonal pattern of weakening ahead of earnings season.

The strategists said “revisions were unusually wide, with a large majority of European subsectors posting upward revisions to net EPS.”

This combination of improving economic data and broader upward earnings revisions provides a more supportive fundamental backdrop for European equities.

Fiscal Policy Turns Into a Growth Driver

Fiscal policy is also becoming more supportive for the eurozone economy after acting as a drag on growth last year.

Citi economists estimate that government spending and fiscal measures could add around 30 basis points to eurozone GDP growth in 2026, following a negative contribution in 2025.

Germany is expected to play a particularly important role. Its budget deficit is forecast to increase from approximately 2.7% of GDP in 2025 to around 4.0% this year as fiscal policy becomes more expansionary.

At the European level, the EU’s proposed seven-year, $2 trillion long-term budget is also approaching its final stages, potentially providing another source of investment and economic support.

Europe Emerges as a Potential AI Diversifier

Europe’s relatively limited exposure to technology compared with other major equity markets could also become an advantage during periods of uncertainty surrounding artificial intelligence.

Citi said the region has been “tending to outperform when sentiment around AI wavers,” suggesting that European stocks can provide diversification when enthusiasm for technology and AI-related companies weakens.

As a result, the strategists believe that “Europe could play an increasingly important role as an AI diversifier in global portfolios.”

This characteristic could become more relevant as AI-related stocks account for an increasingly large share of valuations and performance in other major global equity indices.

Citi Sees Around 8% Upside by Mid-2027

Citi is targeting approximately 8% upside for European equities through mid-2027, although it continues to rate the region Neutral within its global asset allocation framework.

Geopolitical risks remain an important constraint. In particular, renewed increases in oil prices and interest rates could undermine economic growth and corporate earnings, even as investor positioning towards European equities has become more constructive.

Lower oil prices would therefore provide an additional potential tailwind by easing inflationary pressure and reducing costs for energy-importing European economies.

Citi Highlights European Stock Opportunities

Within the region, Citi is screening for companies combining positive EPS momentum, attractive relative valuations, net negative concentration scores and Buy or Neutral ratings from its analysts.

Stocks identified through these criteria include Adyen (EU:ADYEN), LVMH (EU:MC), Novo Nordisk (TG:NOV), Diageo (LSE:DGE) and London Stock Exchange Group (LSE:LSEG), among others.

The combination of improving earnings expectations, greater fiscal support and diversification away from AI-heavy global indices could strengthen the longer-term investment case for Europe, even as Citi remains tactically Neutral on the region.

European equities were little changed on Monday, remaining close to three-week lows as escalating economic tensions between the United States and Iran kept investors cautious. A modest retreat in crude oil prices provided some relief, but broader risk appetite remained subdued.

The pan-European Stoxx Europe 600 Index slipped 0.1% in early trading, keeping the benchmark around levels last seen in early August.

Germany’s DAX, France’s CAC 40 and London’s FTSE 100 were all broadly unchanged as investors awaited further details on Washington’s planned measures against Tehran.

U.S. Threatens Iran With “greatest financial offensive”

Geopolitical developments in the Persian Gulf remained the principal focus after Washington intensified its economic pressure on Iran over the weekend.

The U.S. threatened Tehran with what it described as “the greatest financial offensive ever marshalled,” with sweeping sanctions expected to be announced on Monday. The measures are intended to target foreign countries and trading partners that continue to provide economic support to Iran.

Iranian officials responded by threatening to halt all energy exports originating from the Persian Gulf if Washington continues its economic campaign.

Markets were awaiting a press conference from U.S. Treasury Secretary Scott Bessent scheduled for 1:00 p.m. EDT on Monday, when further details of the sanctions are expected.

Brent crude futures fell around 1.5% to approximately $91.80 a barrel on Monday, offering some respite after prices climbed 5% last week.

However, continuing disruption to shipping through the Strait of Hormuz is restricting seaborne crude oil and LNG movements. The reduced flows are maintaining a supply-risk premium in energy markets and adding to concerns about global inflation.

Nvidia Earnings Put AI Spending in the Spotlight

Nvidia (NASDAQ:NVDA) is due to report second-quarter results after the U.S. closing bell, providing a major test for global technology stocks and investor enthusiasm surrounding artificial intelligence.

Attention will focus on whether continued AI capital expenditure can support elevated valuations among the world’s largest technology companies.

AI hyperscalers have increasingly turned to credit markets, issuing substantial amounts of debt to finance data-centre expansion. Any evidence of slowing revenue growth or weaker-than-expected guidance from Nvidia could therefore weigh on technology shares, including European markets with significant exposure to the sector.

Jackson Hole Speech Could Shape Rate Expectations

Federal Reserve Chair Kevin Warsh is also scheduled to deliver a keynote address at the Jackson Hole Economic Policy Symposium.

Investors in bond and equity markets will closely examine his comments for indications of whether the Federal Reserve intends to leave interest rates unchanged in September following a divided 9-3 FOMC vote.

Persistent inflationary pressure linked to elevated energy prices could complicate the policy outlook and potentially increase the likelihood of another rate increase.

BW Offshore Slides After Profit Forecast Cut

Among individual European stocks, BW Offshore (TG:XY81) fell 14% after the company lowered its pre-tax profit forecast.

The sharp decline stood out during an otherwise subdued European session dominated by geopolitical uncertainty, energy-market risks and anticipation ahead of major U.S. economic and corporate events.

UK equities moved slightly lower on Monday as investors awaited tougher U.S. sanctions against Iran while a steep decline in Asian technology shares contributed to a broader risk-off tone across global markets.

As of 03:18 ET (07:18 GMT), the FTSE 100 was down 0.03%. Germany’s DAX declined 0.25%, while France’s CAC 40 slipped 0.18%. Sterling was little changed against the U.S. dollar, with GBP/USD trading at 1.3643.

Iran Sanctions Remain in Focus

Investor attention remained firmly on Washington as markets awaited further economic measures targeting Tehran.

U.S. Treasury Secretary Scott Bessent described the campaign as entering an “endgame” in a post on social media platform X and warned of an “economic D-Day”.

Iran’s Supreme National Security Council Secretary Mohsen Rezaei responded by warning that Tehran could stop oil exports through the Strait of Hormuz. He also said countries supporting the U.S. campaign could be regarded as committing an “act of war”.

The comments kept geopolitical risks at the forefront for investors, particularly given the Strait of Hormuz’s importance to global energy supplies.

Asian Technology Shares Come Under Pressure

Negative sentiment was reinforced by heavy selling across Asian technology stocks. South Korea’s KOSPI fell sharply, while Hong Kong’s Hang Seng dropped approximately 2.1%.

Samsung Electronics and Alibaba were among the notable technology names under pressure during the Asian session, adding to caution ahead of several potentially significant events for global markets this week.

Investors are preparing for Nvidia’s (NASDAQ:NVDA) earnings on Wednesday, while Federal Reserve Governor Kevin Warsh’s speech at Jackson Hole later in the week is also expected to attract attention.

Johnson Says Iran Conflict Entering “new phase”

Speaker Mike Johnson said in an interview with Fox News that the United States was moving into a “new phase” of the conflict with Iran and that allied countries would provide assistance.

Johnson also said Republicans could retain control of the House of Representatives even if the conflict continued through the November midterm elections.

Oil Prices Fall While Gold Advances

Oil prices moved lower despite the continuing geopolitical uncertainty. Brent crude declined 1.7% to $91.09 a barrel, while WTI fell 2.1% to $85.25.

Gold moved in the opposite direction as demand for defensive assets increased. December gold futures gained 0.42% to $4,700.31, while spot gold rose 0.9% to $4,644.70.

UK Round-Up

Shell (LSE:SHEL) has reportedly attracted interest from ExxonMobil, LyondellBasell, Apollo and Kuwait Petroleum for its U.S. chemicals operations.

The portfolio could be valued at as much as $8 billion, according to a Financial Times report on Monday, as Shell considers the disposal of underperforming chemicals assets.

US equity futures advanced on Friday, pointing to a recovery at the opening bell after Wall Street suffered a broad selloff in the previous session as higher crude prices and rebounding Treasury yields unsettled investors.

The prospect of buying stocks following Thursday’s decline provided some support, although persistent geopolitical tensions and elevated energy prices continued to temper risk appetite.

US crude futures retreated substantially from their earlier highs but remained around 0.2% higher, with markets still focused on the continuing confrontation between Washington and Tehran.

Nvidia results and Jackson Hole loom over markets

Investors may be reluctant to take large positions ahead of a busy week featuring quarterly earnings from Nvidia (NASDAQ:NVDA) and the Jackson Hole economic symposium.

“Next week’s results from Nvidia could put some of the focus back on corporate earnings but, as we head towards the autumn, a chill has started to descend for markets,” said Dan Coatsworth, head of markets at AJ Bell.

He added, “Investors will be looking for a comfort blanket when Federal Reserve chair Kevin Warsh addresses the Jackson Hole meeting at the end of this month.”

Nvidia’s results will provide another indication of the strength of artificial intelligence-related spending, while comments from Jackson Hole could influence expectations for the Federal Reserve’s next monetary policy moves.

Wall Street suffers steep Thursday losses

The expected Friday rebound comes after US equities weakened sharply during Thursday’s session, with losses accelerating as trading progressed.

The Dow Jones Industrial Average sank 703.84 points, or 1.3%, to 52,759.21. The Nasdaq Composite dropped 263.92 points, or 1%, to 26,067.17, while the S&P 500 lost 66.82 points, or 0.9%, to finish at 7,641.16.

The major averages ended close to their session lows, more than reversing the modest gains recorded on Wednesday.

US-Iran tensions send crude prices higher

Oil was a major source of pressure after President Donald Trump intensified his economic threats against Iran.

Trump announced on Truth Social that he was launching “economic warfare” against Tehran, describing the measures as the “most crushing economic operation ever taken against any country.”

He also threatened “tremendous economic consequences” for countries that “allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran.”

Iranian Foreign Minister Abbas Araghchi responded by calling the proposed “Economic D-Day” a “diversion from America’s own crisis: unprecedented debt & surging interest costs.”

“Doubling down on failed policies will only bring further defeat—and enmity of Iranians,” Araghchi wrote on X. “US economic terrorism threatens global economy and sovereignty worldwide.”

US crude futures subsequently jumped almost 3% to their highest levels in nearly a month as markets saw little indication that the conflict was moving closer to a resolution.

Oil rally reverses part of Treasury yield decline

The surge in energy prices also helped drive Treasury yields higher, reversing some of the sharp decline recorded a day earlier.

Yields had dropped on Wednesday after the US Treasury unveiled larger buyback operations for longer-term government debt. However, renewed concerns that elevated energy costs could reinforce inflationary pressures brought sellers back into the bond market.

Higher yields can make equities less attractive by increasing financing costs and improving the relative returns available from fixed-income assets.

Walmart selloff adds to pressure on equities

Walmart (NYSE:WMT) contributed heavily to Thursday’s weakness, plunging more than 9% after reporting disappointing second-quarter comparable-sales growth and issuing weaker-than-expected guidance.

The reaction spread through the retail sector, with the Dow Jones US Retail Index falling 2.5%.

Airline stocks were also hit, sending the NYSE Arca Airline Index down 2.4%, while housing, pharmaceutical and biotechnology shares recorded sizeable declines.

Gold miners were among the notable exceptions, advancing alongside higher precious-metal prices.

US futures are therefore signalling an initial recovery attempt on Friday, but the combination of volatile oil prices, elevated bond yields and geopolitical uncertainty could keep trading cautious ahead of Nvidia’s earnings and Jackson Hole.