Global stock markets experienced sharp swings and oil prices fell on Monday after US President Donald Trump postponed planned strikes on Iranian power plants for five days. The decision followed what Trump described as 'very good and productive' talks between the US and Iran.
European markets, which had opened lower, rebounded after Trump's social media post. The French CAC 40 rose 0.8%, Spain's Ibex gained 1%, and Germany's DAX climbed 1.2%. The FTSE 100, initially down nearly 1.5%, briefly turned positive before closing 0.2% lower. US markets were up more than 1% in early afternoon trading.
Brent crude oil fell 10% to $101 a barrel, reversing earlier gains driven by Trump's weekend threat to strike Iranian infrastructure unless Tehran opened the Strait of Hormuz. UK month-ahead gas prices dropped 6% to 142p a therm. Shares in BP and Shell fell more than 3%.
The US dollar slipped 0.4% against a basket of currencies, while gold prices fell 2.5% to $4,388 an ounce amid expectations of higher interest rates. The 10-year UK gilt yield fell three basis points to 4.95%, after hitting 5% last week for the first time since the 2008 financial crisis.
Prime Minister Keir Starmer was due to chair an emergency Cobra meeting with senior ministers and Bank of England Governor Andrew Bailey to discuss the economic impact of the Iran crisis, including energy security and supply chain resilience. The Treasury said the meeting would also address potential support for households facing a 20% rise in energy bills when the price cap expires at the end of June.
