Category: Market Summary

Investors began the week navigating a mix of geopolitical tensions, concerns over artificial intelligence valuations and anticipation ahead of Apple’s (NASDAQ:AAPL) annual developers conference, where the company is expected to outline the next phase of its AI strategy.

U.S. futures point to a mixed open

At 03:32 ET (07:32 GMT), futures tied to the Dow Jones Industrial Average were down 102 points, or 0.25%, while S&P 500 futures gained 0.3% and Nasdaq 100 futures advanced 0.7%.

The mixed performance followed a sharp sell-off on Wall Street on Friday. A stronger-than-expected U.S. employment report increased expectations that the Federal Reserve may need to maintain a tighter monetary stance or even raise rates later this year if energy-driven inflation accelerates.

The S&P 500 posted a 2.64% decline, its worst daily performance of 2026, ending a nine-week winning streak. Technology stocks were particularly weak, with the Philadelphia Semiconductor Index falling more than 10% after Broadcom’s (NASDAQ:AVGO) quarterly results failed to meet the market’s elevated expectations surrounding AI-related growth.

Commenting on the week ahead, Deutsche Bank analysts wrote: “What a backdrop for the main economic event of the week, namely Wednesday’s May U.S. CPI report.”

They added: “The timing is critical with the [Fed]’s next policy meeting, and Kevin Warsh’s first as Chair, a week later. For a while now the case for hiking has looked notably stronger than the case for a cut and last Friday’s payrolls has hugely reinforced that.”

Fresh Iran-Israel clashes unsettle investors

Geopolitical concerns intensified after Iran and Israel exchanged new strikes, casting doubt on the future of a fragile ceasefire brokered by the United States.

The renewed hostilities mark the first direct military confrontation between the two countries since the truce reached in April.

Reports suggest the latest escalation began with an Israeli strike on Beirut, followed by retaliatory actions from Tehran and further Israeli attacks against targets in western and central Iran.

The Wall Street Journal reported that Israel activated air-raid warning systems and intercepted a ballistic missile launched from Yemen. Iran’s Revolutionary Guards also claimed responsibility for attacks on military airbases in southern Israel.

While President Donald Trump maintained that diplomatic efforts remain on track, an Iranian source involved in negotiations told MS NOW that a deal is “no longer feasible at this stage.”

Oil extends gains amid supply concerns

Brent crude climbed 5.1% to $97.81 per barrel as traders continued to assess the risks posed by disruptions around the Strait of Hormuz.

The strategic shipping route remains a key concern for energy markets, given that roughly 20% of global oil and LNG flows pass through the waterway.

Rising crude prices have reignited fears that inflation could accelerate once again, potentially forcing central banks to keep borrowing costs elevated.

RBC analysts noted that “it seems as though good news is being treated as bad news if it stokes fears of higher interest rates.”

Gold pressured by rates outlook and stronger dollar

Gold prices fell to their lowest level in eleven weeks as investors reassessed the outlook for interest rates.

Higher borrowing costs tend to reduce the appeal of non-yielding assets such as gold, while continued demand for the U.S. dollar has provided an additional headwind for bullion.

ING analysts said: “The geopolitical backdrop is also shifting dollar-positive, with most surprised that Brent is not trading even higher now that Iran and Israel are directly exchanging fire.”

Apple’s AI strategy under the spotlight

Attention is also turning to Apple’s Worldwide Developers Conference, which begins on Monday and is expected to feature a range of AI-related announcements.

Investors are looking for evidence that Apple can close the perceived gap with rivals in the race to commercialise artificial intelligence technologies.

The company has faced criticism following delays to planned Siri upgrades and a lukewarm response to some of its initial AI initiatives.

According to BofA Global Research, “The key announcements to watch include an enhanced Siri experience, progress on Gemini-enabled Apple AI, potential Siri app, and broader app-intent and developer tools that could help define Apple’s agentic AI roadmap.”

FTSE 100 edges higher as oil jumps on Middle East tensions. Tate & Lyle agrees takeover while Audioboom ends sale process after record trading.

Market Overview

European markets weakened as geopolitical tensions in the Middle East weighed on sentiment. The FTSE 100 edged higher by 0.11 per cent, while the CAC 40 and DAX fell 0.32 per cent and 0.75 per cent respectively. In the United States, markets were more resilient, with the Nasdaq rising 1.16 per cent and the S&P 500 gaining 0.74 per cent. Investors continued to assess the impact of renewed Iran-Israel hostilities, while concerns around artificial intelligence valuations also contributed to caution across European equities.

Commodity markets reflected the geopolitical backdrop, with Brent crude surging as traders responded to escalating conflict risks and concerns over energy supply routes. Copper advanced modestly, while gold remained softer despite safe-haven demand. Natural gas declined and Bitcoin weakened against sterling. Currency markets were relatively stable, with sterling strengthening against the euro, yen and Australian dollar, while slipping slightly against the US dollar.

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Market Numbers

FTSE 100: Up (0.11%), 10,345.29

CAC40: Down (-0.32%), 8,218.240

DAX: Down (-0.75%), 24,759.05

NASDAQ: Up (1.16%), 29,185.8

S&P 500: Up (0.74%), 7,412.0

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In the Headlines

Takeover Agreement – Tate & Lyle (LSE:TATE)

Tate & Lyle has agreed a £2.7 billion takeover by a US rival, marking a significant transaction in the food ingredients sector. The deal highlights ongoing consolidation activity and provides shareholders with a clear valuation benchmark amid a challenging global economic backdrop.

Sale Process Ends – Audioboom (LSE:BOOM)

Audioboom has ended its strategic review and abandoned plans for a sale after determining that takeover proposals did not adequately reflect the company’s value. The decision follows record first-half trading performance, with management expressing confidence in the group’s standalone growth prospects.

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Currencies (vs GBP)

USD: Down (-0.04%), $1.3344

CHF: Flat (0.12%), Fr.1.06350

EUR: Up (0.03%), €1.1574

JPY: Up (0.05%), ¥213.765

AUD: Up (0.10%), $1.891290

Bitcoin (BTC/GBP): Down (-0.28%), £47,369.1

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Commodities

Copper: Up (0.33%), 6.33348

Gold: Down (-0.45%), 4,308.77

Brent Crude: Up (4.46%), 96.131

Natural Gas: Down (-0.91%), 3.144

European stock markets traded lower on Monday, while oil prices surged, after renewed hostilities between Iran and Israel raised fears over the durability of a U.S.-brokered ceasefire and added fresh uncertainty to global markets.

By 03:03 ET (07:03 GMT), the pan-European Stoxx 600 had fallen 0.9%. Germany’s DAX dropped 1.3%, France’s CAC 40 declined 0.9%, and the FTSE 100 slipped 0.4%.

The latest escalation marked the first direct exchange of attacks between Iran and Israel since a fragile truce came into force in April.

According to media reports, the confrontation was triggered by an Israeli strike on Beirut, the Lebanese capital. Israel has continued to confront Iran-backed Hezbollah forces in Lebanon, although recent clashes had remained relatively contained. Tehran subsequently launched retaliatory attacks, prompting further Israeli military action targeting sites in central and western Iran.

Israel said on Monday that warning sirens had been activated in response to additional attacks originating from Iran. The country also reported intercepting a ballistic missile fired from Yemen, according to the Wall Street Journal. The newspaper also cited Iran’s Islamic Revolutionary Guard Corps as saying it had targeted airbases in southern Israel.

Despite the renewed violence, U.S. President Donald Trump said the developments would not derail Washington’s efforts to secure a broader peace agreement with Iran. However, an Iranian official told MS NOW that such a deal is “no longer feasible at this stage.”

Oil markets reacted sharply to the geopolitical developments. Brent crude, the international benchmark, rose 5.1% to $97.81 per barrel. Although prices remain below previous peaks above $100 per barrel, they are still significantly higher than levels seen before the conflict intensified.

The rise in energy prices has fuelled concerns that inflationary pressures could re-emerge, potentially prompting central banks, including the European Central Bank, to tighten monetary policy further.

Government bond yields across the eurozone climbed to multi-week highs, adding pressure to equity markets. Investors are now pricing in as many as three ECB interest rate increases before the end of the year. Bond yields move inversely to prices.

Beyond geopolitical risks, investors are also reassessing expectations surrounding the artificial intelligence sector. Sentiment weakened following disappointing quarterly results from chipmaker Broadcom (NASDAQ:AVGO) last week, raising questions about the sustainability of the AI-driven market rally.

A stronger-than-expected U.S. employment report released on Friday further reinforced expectations that the Federal Reserve could maintain a tighter policy stance into 2026.

European semiconductor stocks moved lower in early trading, reflecting weakness across technology shares in Asia and extending the decline seen on Wall Street at the end of last week.

UK equities opened lower on Monday as investors reacted to a sharp escalation in tensions between Iran and Israel, prompting a move away from risk-sensitive assets and driving energy prices sharply higher.

The FTSE 100 was down 0.27% in early trading, while losses across continental Europe were more pronounced. Germany’s DAX declined 1.16% and France’s CAC 40 fell 0.86% as markets assessed the implications of the latest military developments in the Middle East.

Sterling eased marginally against the U.S. dollar, slipping 0.01% to 1.3340. Oil prices surged amid concerns over regional stability and potential supply disruptions. Brent crude rose 4.84% to $97.57 a barrel, while West Texas Intermediate gained 4.42% to $94.54.

The sell-off followed direct military exchanges between Israel and Iran, marking the most significant escalation since the ceasefire agreed in April. Israeli forces reportedly carried out strikes against military-related targets in western and central Iran, including facilities linked to the Karoun petrochemical complex in Mahshahr.

Iran responded through the Islamic Revolutionary Guard Corps, which said it had targeted Israeli air bases at Nevatim and Tel Nof as part of what it called Operation Nasr. Further missile launches towards Israel were reported on Monday morning, triggering air raid warnings across Tel Aviv and central parts of the country.

The situation broadened further as Yemen’s Houthi movement launched additional attacks against Israel and announced a complete ban on Israeli-linked maritime navigation in the Red Sea. Meanwhile, Iran suspended civilian flights at several major airports, and reports indicated widespread internet disruptions across parts of the country.

Market participants are also closely monitoring developments around the Strait of Hormuz, a key global energy transit route. Iranian officials indicated that future access arrangements could be subject to revised conditions, adding to concerns over potential disruptions to oil shipments.

Diplomatic efforts continued behind the scenes, with U.S. President Donald Trump reportedly urging restraint in discussions with Israeli Prime Minister Benjamin Netanyahu. However, rhetoric from regional leaders remained confrontational, increasing uncertainty over the direction of the conflict.

Separately, OPEC+ agreed over the weekend to increase production quotas by 188,000 barrels per day in July in an effort to help stabilise energy markets.

UK corporate highlights

Tate & Lyle agrees £2.7 billion takeover offer

Tate & Lyle (LSE:TATE) announced it has agreed to a £2.7 billion cash acquisition by U.S. ingredients group Ingredion, with shareholders set to receive a substantial premium to the pre-offer share price.

Debenhams expands into beauty through Revolution partnership

Debenhams Group (LSE:DEBS) has entered into a licensing agreement with Revolution Beauty (LSE:REVB) to develop fragrance and beauty products under several of its fashion and lifestyle brands, extending its presence into higher-growth consumer categories.

U.S. equity futures traded lower ahead of Friday’s opening bell, with ongoing weakness in technology stocks expected to weigh on broader market sentiment.

The decline was led by Nasdaq 100 futures, which fell 1.3%, highlighting continued investor caution toward semiconductor and artificial intelligence-related stocks.

Broadcom Outlook Continues to Impact Chip Sector

Pressure on technology shares persisted following Thursday’s disappointing market reaction to Broadcom’s (NASDAQ:AVGO) forward guidance.

While the company exceeded earnings expectations, investors appeared unconvinced that its outlook justified the sector’s elevated valuations after months of strong gains.

Daniela Hathorn, Senior Market Analyst at Capital.com, noted: “The market is no longer asking whether AI demand is strong, that has largely been established.”

She added: “Instead, investors are beginning to question how much of that growth is already reflected in valuations.”

Hathorn also remarked that “In that sense, Broadcom’s results may not have been disappointing, but they were perhaps not enough to justify another leg higher immediately after such a powerful rally.”

Stronger Employment Report Pushes Bond Yields Higher

Investor sentiment weakened further after the release of stronger-than-expected U.S. labor market data.

According to the Labor Department, nonfarm payrolls increased by 172,000 jobs in May following a revised gain of 179,000 in April.

Market forecasts had called for an increase of 85,000 jobs, compared with the originally reported 115,000 gain in the prior month.

The stronger reading prompted a rise in Treasury yields as traders reassessed expectations for Federal Reserve policy and the possibility that interest rates could remain elevated for an extended period.

Dow Jones Hits Record High Despite Divergent Market Performance

Thursday’s trading session produced mixed results across major U.S. indices.

The Dow Jones Industrial Average surged 874.86 points, or 1.7%, to finish at a record closing level of 51,561.93.

The S&P 500 advanced 0.4% to 7,584.31.

Meanwhile, the Nasdaq Composite slipped 0.1%, ending the session at 26,830.98 as technology stocks lagged the broader market.

UnitedHealth Leads Blue-Chip Rally

One of the strongest contributors to the Dow’s gain was UnitedHealth (NYSE:UNH), which climbed 5.2%.

The advance followed a rating upgrade from Bank of America, which raised its recommendation on the healthcare giant from Neutral to Buy.

American Express (NYSE:AXP), Goldman Sachs (NYSE:GS) and Merck (NYSE:MRK) also recorded notable gains.

Technology Sector Struggles After Broadcom Sell-Off

Technology stocks remained under pressure as Broadcom shares dropped 12.6%, despite the company’s earnings beat.

Investors were hoping management would increase its annual forecast for AI-related semiconductor sales beyond the existing $100 billion target.

AJ Bell Head of Markets Dan Coatsworth said: “Broadcom may have emerged as a key player in the booming AI infrastructure market, with a particular expertise in the custom chips increasingly being used by the likes of Alphabet and Meta.”

He added: “However, just like its rival Nvidia, Broadcom is finding that meeting and even slightly beating forecasts is not enough when the market is holding it to such a high standard.”

Financials and Healthcare Offset Technology Weakness

While semiconductor and hardware companies struggled, several sectors posted strong gains.

Banking shares advanced significantly, lifting the KBW Bank Index 3.7% to its highest closing level in nearly four months.

Healthcare and pharmaceutical stocks also performed strongly, with the NYSE Arca Pharmaceutical Index gaining 3.5% and the Dow Jones U.S. Health Care Index rising 3%.

Additional strength came from brokerage firms, biotechnology companies and commercial real estate stocks, helping support the broader market despite ongoing weakness in technology.

European equities traded modestly higher on Friday, although investor sentiment remained cautious as markets continued to monitor developments in the Middle East.

Regional tensions intensified after Hezbollah rejected a newly proposed ceasefire arrangement with Israel. Meanwhile, the Israel Defense Forces (IDF) announced the killing of Abed Harb, identified as the commander of Hezbollah’s engineering unit, adding to concerns over a further escalation in the conflict.

Major Indices Post Limited Gains

Trading activity remained subdued across the region.

Germany’s DAX Index hovered close to flat territory, while France’s CAC 40 Index and the U.K.’s FTSE 100 Index both advanced by around 0.3%.

Investors largely refrained from taking aggressive positions as geopolitical uncertainty continued to dominate market sentiment.

Technology Sector Under Pressure

Technology shares were among the weakest performers of the session following disappointing reactions to earnings news from Broadcom.

Infineon Technologies (TG:IFX) dropped 6.6%, while semiconductor equipment maker ASM International lost more than 4%.

The declines reflected broader concerns over the outlook for the technology sector after recent enthusiasm surrounding artificial intelligence-related stocks.

Energy Stocks Ease as Oil Prices Stabilize

Energy companies also traded slightly lower after crude oil prices steadied following losses in the previous session.

Among the major movers, BP Plc (LSE:BP.) and Shell (LSE:SHEL) both recorded modest declines as investors assessed the latest developments in energy markets.

Bodycote Slides After Apollo Withdraws Interest

Bodycote (LSE:BOY) was one of the session’s biggest fallers, with shares tumbling approximately 10%.

The decline followed news that Apollo Global Management had abandoned plans to pursue a £1.52 billion ($2.04 billion) takeover of the British thermal processing specialist.

The decision removed the prospect of a near-term acquisition premium that had previously supported the stock.

Raspberry Pi Surges on Strong Earnings Outlook

In contrast, Raspberry Pi Holdings (LSE:RPI) emerged as one of the strongest performers in the market.

Shares of the single-board computer manufacturer jumped around 20% after the company said it now expects full-year earnings to come in well ahead of current market forecasts.

The upbeat guidance fueled strong investor demand and helped offset weakness elsewhere in the technology sector.

FTSE 100 slips as Middle East tensions weigh on sentiment. STV lifts advertising outlook, Raspberry Pi raises forecasts, while Brent crude falls.

Market Overview

Markets were mixed heading into the UK session. The FTSE 100 fell 0.51 per cent to 10,340.81 as investors weighed reports of stalled UK house price growth and ongoing concerns around risks to shipping and energy markets linked to tensions in the Middle East. European markets outperformed, with the CAC 40 rising 1.15 per cent and the DAX gaining 0.60 per cent, while US markets weakened overnight as the Nasdaq declined 0.79 per cent and the S&P 500 slipped 0.40 per cent amid caution around technology stocks and broader risk sentiment.

Commodity markets were softer, with copper, gold, Brent crude and natural gas all trading lower. Bitcoin also retreated against sterling, reflecting reduced appetite for risk assets. Sterling strengthened against the US dollar, Japanese yen and Australian dollar, while easing slightly against the Swiss franc. Oil steadied after recent volatility, but geopolitical uncertainty and concerns around global trade conditions continued to influence investor positioning.

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Market Numbers

FTSE 100: Down (-0.51%), 10,340.81

CAC40: Up (1.15%), 8,244.290

DAX: Up (0.60%), 24,944.95

NASDAQ: Down (-0.79%), 30,064.7

S&P 500: Down (-0.40%), 7,545.1

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In the Headlines

Advertising Demand Boost – STV Group (LSE:STVG)

STV raised its near-term advertising expectations after stronger demand linked to the upcoming FIFA World Cup boosted bookings. The broadcaster nevertheless cautioned that wider advertising market conditions remain challenging, highlighting ongoing uncertainty across the sector.

Forecast Upgrade – Raspberry Pi Holdings (LSE:RPI)

Raspberry Pi lifted its annual profit forecast following strong first-half trading and continued demand for its computing products. The upgrade signals improving momentum for the technology company and reinforces confidence in its growth outlook.

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Currencies (vs GBP)

USD: Up (0.16%), $1.3442

CHF: Down (-0.11%), Fr.1.05872

EUR: Flat (0.00%), €1.1555

JPY: Up (0.07%), ¥214.968

AUD: Up (0.24%), $1.88510

Bitcoin (BTC/GBP): Down (-2.52%), £46,359.0

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Commodities

Copper: Down (-1.83%), 6.44468

Gold: Down (-0.23%), 4,465.17

Brent Crude: Down (-0.86%), 93.553

Natural Gas: Down (-0.51%), 3.335

U.S. stock index futures moved lower on Friday as investors navigated renewed geopolitical risks in the Middle East and prepared for the release of key labor market data that could shape expectations for future Federal Reserve policy.

Market sentiment was also pressured by signs that the powerful rally in artificial intelligence-related stocks may be losing momentum following mixed reactions to recent corporate earnings.

Technology Shares Weigh on Futures

By early morning trading, futures on the S&P 500 and Nasdaq 100 were firmly in negative territory, while Dow Jones futures traded near flat.

The weakness followed Broadcom’s (NASDAQ:AVGO) latest earnings announcement, which failed to meet the market’s lofty expectations and sparked selling across the semiconductor sector. Shares of Micron (NASDAQ:MU), Intel (NASDAQ:INTC), and Advanced Micro Devices (NASDAQ:AMD) were among those affected.

Even so, Thursday’s broader market performance remained constructive, with gains in cyclical and value-oriented sectors helping offset pressure on technology stocks.

As analysts at Vital Knowledge noted, “[T]he Broadcom disappointment […] triggered selling in certain semiconductor stocks and parts of the data center infrastructure complex but rather than cause a broad market slump, money instead simply rotated elsewhere, including pockets of value/cyclical.”

Middle East Tensions Continue to Escalate

Geopolitical concerns intensified after Hezbollah formally rejected a ceasefire agreement between Israel and Lebanon, a development that may complicate ongoing diplomatic efforts involving Iran and the United States.

Tehran has repeatedly linked any broader peace discussions with Washington to a halt in hostilities in Lebanon, making the latest setback significant for regional negotiations.

Hezbollah leader Naim Kassem sharply criticized the agreement, calling it “absurd, humiliating, and insulting.”

Reports from the Associated Press indicated that the statement followed Israeli strikes that killed at least four people, while Lebanese forces entered parts of southern Lebanon that have experienced months of conflict.

Oil Markets Monitor Hormuz Developments

Energy traders remained focused on the Strait of Hormuz, where continued tensions between Washington and Tehran have disrupted tanker traffic and heightened concerns over global oil supplies.

Although Brent and WTI crude prices eased modestly, they remain elevated compared with levels seen before the conflict intensified.

Market participants continue to assess whether sustained supply disruptions could fuel inflationary pressures and alter the outlook for monetary policy worldwide.

Employment Data Could Influence Fed Expectations

Investors are now awaiting the latest U.S. nonfarm payrolls report, which is expected to provide a clearer picture of labor market conditions.

Consensus forecasts point to the creation of 85,000 jobs in May, with the unemployment rate holding steady at 4.3%.

The report arrives at an important time for the Federal Reserve, whose policymakers must balance inflation risks against economic growth and employment objectives. Under new Chair Kevin Warsh, the central bank faces heightened scrutiny as markets attempt to gauge the future direction of interest rates.

Report Highlights Possible Government Investment in AI Firms

Separately, NOTUS reported that senior U.S. officials have explored the possibility of the federal government acquiring equity stakes in major artificial intelligence companies.

According to the report, discussions focused on voluntary share transfers, with OpenAI chief executive Sam Altman reportedly participating in talks with senior Trump administration officials.

The report suggested that any returns generated from such investments could be directed toward public programs, including potential dividend distributions to American households.

While still at a preliminary stage, the discussions underscore the growing strategic importance of artificial intelligence to both policymakers and investors.

European stock markets traded modestly lower on Friday morning as investors weighed ongoing geopolitical uncertainty in the Middle East alongside signs that enthusiasm surrounding artificial intelligence-related stocks may be cooling.

By 03:16 ET (07:16 GMT), the pan-European Stoxx 600 index was down 0.2%. Germany’s DAX lost 0.3%, London’s FTSE 100 declined 0.2%, while France’s CAC 40 was little changed.

Geopolitical Concerns Continue to Pressure Sentiment

Investor confidence remained fragile after Hezbollah rejected a proposed ceasefire arrangement between Israel and Lebanon, raising fresh questions over the prospects for a broader diplomatic breakthrough involving the United States and Iran.

Tehran, a key supporter of Hezbollah, has consistently linked progress in its negotiations with Washington to an end to hostilities in Lebanon, making the latest developments a setback for peace efforts.

Strait of Hormuz Remains a Major Market Focus

The continuing deadlock between the United States and Iran has also maintained pressure on the Strait of Hormuz, one of the world’s most important energy shipping routes.

Disruptions to tanker traffic through the waterway have tightened global supply flows and heightened concerns over the potential economic consequences of a prolonged standoff.

Brent crude, the international oil benchmark, was last trading 0.2% lower at $94.85 per barrel. Although below recent highs, prices remain significantly elevated compared with levels seen before the conflict intensified.

In comments released during the week, Hezbollah leader Naim Kassem described the ceasefire agreement brokered by Washington between Israel and Lebanon as “absurd, humiliating, and insulting.”

According to the Associated Press, the statement followed Israeli attacks that reportedly killed at least four people. The news agency also reported that Lebanese military forces entered parts of southern Lebanon on Thursday after months of heavy fighting in the region.

Semiconductor Stocks Retreat as AI Trade Pauses

Away from geopolitical developments, investors also reassessed the technology sector after signs of a slowdown in the powerful artificial intelligence-driven rally that has supported semiconductor shares in recent months.

Sentiment was partly affected by results from chipmaker Broadcom (NASDAQ:AVGO), which failed to fully meet elevated market expectations earlier this week.

The weakness was reflected across the European semiconductor sector. Shares in Dutch chip equipment manufacturer ASML (EU:ASML) fell 3.0%, while Germany’s Infineon (TG:IFX) dropped 5%. France-based STMicroelectronics (EU:STMPA) also came under pressure, declining 3.3%.

The pullback suggests investors may be taking a more cautious approach toward AI-related stocks following an extended period of strong gains.

UK equities traded lower on Friday as investors digested fresh signs of softness in the housing market while keeping a close watch on escalating geopolitical risks in the Middle East.

The latest Halifax House Price Index showed that average UK property prices declined for a second consecutive month in May, falling 0.1% to £298,806. Annual growth remained subdued at just 0.5%, highlighting ongoing pressure on the residential property sector.

European Markets Open on the Back Foot

By 03:20 ET (07:20 GMT), the FTSE 100 was down 0.23%, while sterling traded little changed against the US dollar at 1.3439, up 0.08%.

Across Europe, Germany’s DAX fell 0.34%, while France’s CAC 40 lost 0.07%, reflecting broader investor caution.

Housing Market Continues to Face Affordability Pressures

The Halifax report pointed to persistent challenges for homebuyers, with elevated borrowing costs continuing to limit affordability.

Amanda Bryden, Head of Mortgages at Halifax, said “property price trends continue to reflect the uncertainty linked to developments in the Middle East,” adding that “higher inflation expectations have kept borrowing costs above the level seen at the start of the year, continuing to stretch affordability for many buyers.”

Regional disparities remained evident across the UK housing market. Northern Ireland recorded the strongest annual price growth at 7.8%, while London saw prices decline 1.5% to £534,375. South East England also experienced a notable fall, with values dropping 2.1% to £382,704.

Oil Market Jitters Add to Investor Concerns

Housing data arrived amid renewed volatility in energy markets, with Brent crude trading near $95 per barrel and heading for a weekly gain exceeding 3%.

The rise followed an explosion near Oman’s Mina al Fahal oil terminal, which temporarily disrupted loading operations at the country’s main crude export facility. If maintained through the end of the trading week, Brent’s advance would end a two-week losing streak.

Oman’s state news agency later reported that operations had resumed normally, citing Petroleum Development Oman, although authorities did not provide details regarding the cause of the incident.

Reuters had previously reported that the explosion near the terminal’s offshore loading facilities was believed to have resulted from a drone attack.

Strait of Hormuz Remains in Focus

Energy traders continue to monitor developments around the Strait of Hormuz, a critical route for global oil exports.

According to data from Lloyd’s List, Iranian crude exports fell 84% in May compared with the previous month and were 87% below their average level over the past year, reflecting increased US pressure on Tehran’s shipping activities.

Iranian parliament deputy speaker Hamidreza Haji-Babaei said lawmakers had reviewed plans governing vessel traffic through the strategic waterway and indicated that a “powerful resolution” would be approved, although no further details were provided.

Diplomatic Progress Remains Limited

On the diplomatic front, Iranian Foreign Minister Abbas Araghchi said that “no tangible progress” had been achieved in talks with Washington, though communication channels between the two sides had not been completely severed.

Araghchi also dismissed comments by US President Donald Trump regarding a possible meeting with Iran’s supreme leader Mojtaba Khamenei, saying the matter should be viewed “in the real world.”

Speaking from the Oval Office on Thursday, Trump revealed that he had considered deploying special operations forces to secure Iran’s stockpile of highly enriched uranium but ultimately rejected the proposal due to the risks associated with a prolonged military operation inside an active conflict zone.

Lebanon Ceasefire Efforts Face New Obstacles

Meanwhile, prospects for stability in Lebanon appeared to deteriorate further.

The fragile ceasefire framework brokered with US involvement suffered a setback after Hezbollah leader Sheikh Naim Qassam firmly rejected the proposal, describing the agreement as “a roadmap for the destruction of part of the Lebanese people.”

His comments added to concerns that efforts to reduce tensions across the region may face significant obstacles in the weeks ahead, leaving markets sensitive to further geopolitical developments.