Oil prices retreated from earlier highs and stock markets recovered on Monday after Iran announced the end of its military operations against Israel. Brent crude, which had surged to $98 a barrel earlier in the day, fell back to around $94.56, up about 1.5% on the day. The pan-European Stoxx 600 index turned slightly higher, and London's FTSE 100 closed up 5 points at 10,373.
The easing of tensions followed a report that Iran's military joint command was halting offensive operations after an exchange of fire with Israel. US President Donald Trump had urged both sides to 'immediately stop shooting'. The news prompted a rapid reversal in risk aversion, with government bond prices recovering and yields falling on UK, US and eurozone debt.
However, housebuilders' shares fell on concerns that the Middle East conflict could keep borrowing costs elevated. In Asia, South Korea's KOSPI index slumped 8%, highlighting ongoing fragility in tech valuations. On Wall Street, the S&P 500 rallied 0.8%, with some investors 'buying the dip' after Friday's sell-off.
Mike Bell, head of market strategy at RBC BlueBay, said: 'Investors have been conditioned over the last 15 years to buy the dip, and there was certainly a big dip in some stocks on Friday.' Joe Mazzola of Charles Schwab noted that the chip sector's 10% plunge on Friday had made it Wall Street's worst day of the year, but bargain-hunting lifted stocks.
In other news, the Financial Conduct Authority (FCA) has begun civil proceedings against fund manager Neil Woodford, accusing him of providing unauthorised investment advice through his subscription platform. The FCA is seeking an injunction to stop the activities, which it says breach the Financial Services and Markets Act 2000. Woodford was fined £5.89m in August 2025 over the collapse of his equity fund.
