Mixed day for stocks as oil prices climb amid ongoing Iran-US deadlock

UK stock markets closed mixed on Monday, with the FTSE 100 gaining 0.4% to 10,269.43, while the FTSE 250 dropped 0.2% and the AIM All-Share rose 1.0%. Oil prices surged to $103.70 per barrel for Brent crude, up from $101.49 on Friday, as tensions between the US and Iran persisted without progress in peace talks. The ongoing deadlock raised fears of further violence and supply disruptions through the Strait of Hormuz, keeping oil prices volatile. The US rejected Iran’s latest demands, with former President Donald Trump calling Tehran’s response “totally unacceptable” on social media. Iran had sought the release of frozen assets and an end to US port blockades. Analysts noted that even a partial reopening of the Strait could ease pressure on prices, though seasonal demand and low commercial stock levels may keep crude elevated near $100 through 2026. In Europe, the CAC 40 in Paris fell 0.7%, while Germany’s DAX rose slightly. US markets closed modestly higher, with the Dow up 0.1%, S&P 500 rising 0.3%, and Nasdaq gaining 0.2%. Meanwhile, UK bond yields increased amid political uncertainty, with Prime Minister Keir Starmer facing leadership challenges after poor local election results. Labour MPs called for a transition timeline, though Starmer’s speech aimed to reassure investors. The pound strengthened slightly against the dollar and euro, while Airtel Africa shares jumped 15% after its parent company, Bharti Airtel, reported gains. Investors remained cautious, balancing Middle East geopolitical risks with domestic political instability, which could deter long-term investment. Analysts warned that unresolved tensions in the region and UK leadership concerns could prolong market volatility.