Stocks mixed amid lack of Middle East progress

UK stock markets opened Monday with mixed results as investors weighed escalating tensions in the Middle East and evolving US economic data. The FTSE 100 gained 0.1% to close at 10,373.20, recovering from an intraday low of 10,319.17, while the FTSE 250 dropped 0.2% and the AIM All-Share fell 0.5%. The uncertainty stemmed from Iran’s announcement that it had ended its latest military operation against Israel after overnight strikes, though fears of broader conflict persisted. US markets rebounded after a sharp Friday decline, with the Dow Jones rising 0.2%, the S&P 500 up 0.8%, and the Nasdaq climbing 1.5%. The rally followed a strong US jobs report that dashed hopes for Federal Reserve interest rate cuts, pushing expectations of a rate hike back into play. Analysts noted that markets now anticipate delayed cuts, with Goldman Sachs adjusting its forecast to June and December 2027. Oil prices saw volatility, with Brent crude trading at $94.75 per barrel after earlier gains, reflecting reduced tensions but lingering geopolitical risks. Meanwhile, currency markets remained stable, with the pound trading at $1.3339 and the euro at $1.1539. US Treasury yields edged up, with the 10-year at 4.56% and the 30-year at 5.02%. In London, housebuilders like Barratt Redrow faced pressure as fears of prolonged high interest rates weighed on the sector. Analysts suggested the recent market correction could be healthy for long-term stability, though near-term volatility remains high due to geopolitical and monetary policy uncertainties.