Closing post
After a choppy day’s trading, London’s stock market has closed very slightly higher.
The FTSE 100 share index ended the day up 5 points, or 0.05%, at 10,373 points.
But housebuilders’ shares fell, on concerns that the Middle East conflict will continue to push up borrowing costs.
City traders took some solace from the rally on Wall Street today, where the S&P 500 index is up 0.8%. That’s lifting hopes that Friday’s sell-off wasn’t the start of a wider market downturn.
But after South Korea’s KOSPI index slumped by 8% today, tech valuations could still be on shaky ground.
Oil is up about 1.5% today, at $94.56 a barrel, having jumped 5% this morning following the latest attacks between Israel and Iran, before the sides de-escalated.
That’s all for today – here’s our story on the markets:
And here’s our Middle East liveblog:
Mike Bell, head of market strategy at RBC BlueBay, also argues that stock bargain-hunting has lifted the markets today.
He explains, via the FT:
“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.”
US households have grown more worried over their financial situation, according to a Federal Reserve Bank of New York survey.
The poll found that the share of Americans who believe things are much worse than they were 12 months ago has hit a nearly four-year high
The share of those seeing their current situation as “much worse” than a year ago leaped to 13.3%, up about 2.7 percentage points from April and the highest since July 2022. The total of those seeing either a much or somewhat worse situation from a year ago stood at 43.7%, which the New York Fed said was the highest since January 2023.
The jump on Wall Street today shows some investors have been eager to ‘buy the dip’.
Joe Mazzola, head trading & derivatives strategist at Charles Schwab, explains:
“Stocks scrambled higher early today, seeing some “buy the dip” action after the chip sector’s 10% plunge made Friday Wall Street’s worst day of the year. The weekend didn’t exactly calm matters, featuring new flare-ups in the Middle East, while inflation data due later this week could reinforce ideas that expensive crude is spilling into the broader economy.”
FCA takes legal action against Neil Woodford
Britain’s financial regulator has announced it has started civil proceedings against fund manager Neil Woodford.
The FCA is accusing Woodford of providing “regulated investment advice and making financial promotions” through the subscription-based platform, www.w4pz.com, without authorisation.
The regulator argues that this activity breaches sections 19 and 21 of the Financial Services and Markets Act 2000.
The FCA is seeking an injunction against Mr Woodford and his W4.0 service – which is registered in the United Arab Emirates – to stop them carrying on the “potentially unlawful activities”.
In August 2025 the FCA banned Woodford from holding senior manager roles and managing funds for retail investors, and fined him £5.89m, over the collapse of his popular equity fund.
If you visit W4.0, the website says:
We exist to explain active investment strategies — with full transparency — so you can see what’s inside, why it’s there, and the thinking behind it.
We are not regulated by the FCA or any other regulatory body, and we do not provide financial advice.
European stocks markets are looking brighter than this morning too.
Italy’s FTSE Mib is now up 0.7%, while France’s CAC index is flat.
US tech stocks rebound
Technology stocks are leading the risers on Wall Street, after Friday’s rout.
Chip stocks are hot. Intel are leading the S&P 500 risers, up 9.6%, followed by Micron (+8.4%), while AMD have gained 4%.
US stock market opens higher
Wall Street has opened higher, as the US stock market recovers from its worst day in months.
The news that Iran and Israel say they have halted attacks on each other, after both nations earlier traded attacks, has calmed nerves on the New York stock exchange.
The S&P 500 share index is up 0.95% in early trading – on Friday it dropped by 2.64%, its worst day since October.
The Nasdaq has jumped by 1.5%, having slumped by 4.2% on Friday.
Updated
Nationwide CEO's pay packet almost doubles to £4.7m
Nationwide has nearly doubled its CEO Debbie Crosbie’s pay packet to £4.7m, a year after the building society pushed through a controversial bonus scheme.
The mutual, which is owned by its members, released its annual report today, showing Crosbie was handed £3.2m in bonuses, up from £1.1m a year earlier.
It pushed her overall pay to £4.67m, marking a 87% jump on the £2.49m she earned the previous year.
Meanwhile, eligible staff within the wider 26,890-strong workforce will see their pay rise an average of 3.8% from 1 July.
Commenting on the staff pay bump, Nationwide board member and remuneration committee chair Tracey Graham said:
“These changes reflect a significant investment in our people, recognising the contribution and commitment of those at the heart of serving our customers and delivering our strategy.”
Crosbie’s bonus hikes follows an overhaul of Nationwide’s bonus scheme, allowing Crosbie to earn up to £7m - up 43% from previous max payout levels - following the takeover of Virgin Money.
The lender controversially failed to give members a binding vote on the matter, with their votes having only been considered on an ‘advisory’ basis.
Crosbie’s latest pay package also included a salary worth £1.2m (which was hiked another 2.9% in April), topped up by a £193,000 pension and £50,000 worth of taxable benefits like business travel, medical insurance, a car allowance and personal security.
Nationwide is now asking its members to vote in favour of the pay report at its 13 July AGM, where they will also be asked to weigh in on letting a fellow member into the board room for the first time in 25 years.
Updated
Analyst: Tech’s record pullback is just a ‘healthy reset’ for the bull market
Last Friday’s tech stock sell-off was necessary blowing off of steam in a bull market that required cooling, according to Morgan Stanley strategists.
Friday’s selloff was led by semiconductor and memory stocks, where very strong gains for the year were made vulnerable by crowded investor positioning and the dynamics of levered exchange-traded funds, says [Morgan Stanley’s Mike] Wilson.
Wilson highlights the Philadelphia Stock Exchange Semiconductor Index, which fell 10% on Friday, its biggest one-day drop since 2020.
But “the starting point matters,” he says. “The index had risen 96% year to date into the middle of last week and was around 35% above its 50-day moving average, the widest gap in around 25 years. It also had a 9-day relative strength index of 83, underscoring how extended the move had become.”
Wall Street is set to open higher in an hour and a quarter’s time.
The Nasdaq futures contract is up 1.25%, while the S&P 500 is on track to gain around 0.66%.
Oil falling back and markets recovering after Iran announces 'end of military operations' against Israel
A sense of calm is returning to markets, as news breaks that Tehran has announced that end of its military operations against Israel.
Iranian military’s joint command says it is halting its offensive operations after Israel and Iran had exchanged fire, Associated Press report, after Trump asked both sides to “immediately stop shooting”.
The oil price is rapidly dropping back from its earlier highs – Brent crude is now up just 1.75% at $94.58 a barrel, having hit $98 earlier today.
European stock markets are shaking off their earlier losses too – with the pan-European Stoxx 600 index now slightly higher.
Government bond prices are recovering too, which is pulling down the yield (or interest rate) on UK, US and eurozone debt.
Updated
After a weak start, the UK’s FTSE 100 share index has now pushed into positive territory.
The ‘Footsie’ is up 22 points, or 0.2%, at 10,390 points.
Traders may be reassured that Donald Trump has demanded Israel and Iran both “immediately stop shooting”:
Weapons maker BAE Systems is among the top risers, though, up 1.45%…
The GMB union’s annual congress in Blackpool has heard that driverless taxis could cost 300,000 drivers their jobs.
The congress agreed to call on the Government to introduce laws to protect taxi and private hire drivers from job losses and reductions in earnings caused by the rollout of driverless vehicles.
Ali Haydor, private hire driver and GMB Congress delegate told the event:
“We hear a lot from those on the right of politics about people not working and relying on benefits, but replacing human workers will potentially push thousands into unemployment and poverty.
“The gig economy firms present driverless taxis as progress - they tell us this technology will increase efficiency, reduce costs and benefit society, but progress for whom?
“Technology will continue to develop, but workers should not be expected to carry all the risks while companies take all the rewards.”
Last month, ministers began inviting bids from operators to run autonomous taxis, buses and private-hire cars in the UK.
Update: UK company Wayve is planning to offer its driverless vehicles to paying passengers in the capital “in the next couple of months” – The Times have more detaile here.
Updated
Battle over world's oldest bank
A fresh battle is taking place over the future over the world’s oldest bank: Italy’s Monte dei Paschi di Siena (MPS).
Intesa Sanpaolo, which is currently Italy’s largest bank, tabled an unsolicited €30.6bn bid for its rival on Monday. If successful, that would create the euro zone’s second biggest banking group by market cap, worth €126bn, behind Spain’s €155bn Banco Santander.
However, that proposal came hours after Italy’s fourth largest lender, Banco BPM, on Sunday sent a letter to MPS suggesting a merger that would create a “new national champion”, and the second largest bank in Italy, leapfrogging Unicredit – with a market cap of around €50bn.
The tug of war comes two years after MPS returned to private ownership, having been bailed out by the Italian government in 2017 and privatised in 2023/2024. It has been eyed as a potential takeover target since, but took markets by surprise when it bought and merged with rival Mediobanca in a €16bn deal last year.
Intesa’s gatecrashing bid could have consequences for the historic MPS brand, which dates back to 1472. Intesa’s bid involves breaking up the bank, selling 635 MPS branches and the MPS brand to insurer Unipol Assicurazioni. Intesa would keep Mediobanca, as well as its 13% stake in insurer Generali.
The hope is that the arrangement would head-off any competition issues.
All eyes are now on MPS bosses’ response, which could ultimately transform Italy’s banking landscape.
Over in Copenhagan, shares in drugmaker Zealand Pharma are down 25% after trial data showed its injectable obesity drug survodutide had worse side effects and higher patient dropout rates than rival treatments.
Late-stage data from two studies of the drug, presented last weekend at a medical conference, showed that nearly one in four patients taking the highest 6-milligram dose of survodutide stopped treatment due to side effects, with about one in five dropping out specifically because of gastrointestinal problems.
Jefferies: not worried about an AI bubble
The markets “turned ugly” on Friday, says Mohit Kumar, economist at investment bank Jefferies, as tech companies led a sell-off in equity markets.
But despite that, Kumar says “We are not worried about an AI bubble,” explaining:
Capex spending is still strong and capex spending as a proportion of free cash flow remains well below the 1999–2000 levels.
One area where we differ relative to 1999-00 is that in the dot com era, a bulk of capex spending was done though debt and equity issuance. The mix is changing, but we are still far from concerning levels of the dot-com era.
After a rough day on Friday, US tech stocks may recover some losses today.
The Nasdaq Composite index is on track to rise by 0.6%, according to the futures market.
Derren Nathan, head of equity research at Hargreaves Lansdown, says:
Despite the overnight sell-off in Asia, US investors look to be taking a more measured view with futures in the tech-led NASDAQ holding firm compared to a 0.4% decline in the more broadly focussed Dow Jones Industrial Average.
With SpaceX, potentially the largest IPO in history, now teed up on the launch pad for Friday, and UK retail investors being offered unprecedented access, the market mood in this week’s countdown will be closely monitored.”
Updated
An index of European tech stocks, the Stoxx Europe 600 Technology Price Index, is down almost 0.5% this morning.
Nvidia CEO: selloff in tech stocks is a buying opportunity
Nvidia chief executive officer Jensen Huang has called the global tech stocks selloff that began last week a buying opportunity, Bloomberg reports.
During his trip to Seoul (see earlier post), Huang argued that the buildout of artificial intelligence has just begun.
Asked selloff should be perceived, Huang said the industry was still in the early stages of constructing infrastructure that will serve as the foundation of an AI-fueled future.
Huang said:
“We’re at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount.
Everybody should be very excited.”
Oil his $98 after explosions heard in central Tehran
Reports that explosions have been heard in central Tehran this morning have pushed the oil price higher.
Brent crude just hit $98 a barrel, a rise of 5% today, up from $93.08 on Friday night.
Israel’s IDF have also said in a post on X that dozens of air force fighter jets have “completed an extensive strike” on “strategic defence systems” in Iran.
My colleagues Dan Milmo, Aisha Down and Ana Lucía González Paz have looked into the AI boom here:
Here are some charts from their report:
Europe’s Stoxx 600 share index has dropped to a two-week low this morning, weighed by escalating tensions in the Middle East and a global selloff in AI stocks
Why AI stocks are selling off
Several factors came together to trigger the stock market sell-off which began on Friday, and is continuing today, says Charu Chanana, chief investment strategist at Saxo.
Chanana explains that while Friday’s strong US jobs report was the trigger, but the deeper issue was crowded positioning in the market for shares in AI and semiconductor companies.
Chanana cites five reasons why shares in the AI sector are falling:
-
AI crowding: Semiconductors and AI-linked names had become the default long trade. When everyone owns the same winners, even a small disappointment can lead to a much bigger unwind.
-
Top-heavy leadership: A small group of AI winners had been doing a lot of the heavy lifting for the broader index. That can make the market look stronger on the way up, but more fragile on the way down.
-
Expectations were too high: The reaction to Broadcom showed that “good” is no longer enough for AI-linked names. Investors want upside surprises, stronger guidance, clear monetisation and proof that AI demand is still accelerating. Anything short of that can become an excuse to take profits.
-
AI funding questions: AI is not just a growth story; it is also a very capital-intensive one. Alphabet’s funding moves, and now Meta’s, are reminders that the next leg of AI infrastructure needs serious money. Investors are becoming more focused on who funds that buildout, whether capex remains disciplined, whether dilution risk rises, and whether returns can justify the spending.
-
Geopolitical risk added pressure: Rising Middle East risks, oil volatility and fading peace hopes were not the main reason AI sold off, but they added another layer of uncertainty. When markets are already stretched, bad news travels faster.
Updated
Tate & Lyle agrees to be taken over
Ingredients developer Tate & Lyle has become the latest UK company to fall to an overseas takeover.
Tate & Lyle has agreed to be bought by US rival Ingredion in a £2.7bn deal, sending its shares up 12% this morning.
Once famous for sugar refinering, Tate & Lyle now makes sweeteners, fibres and stabilisers for food producers to include in their products.
Victoria Scholar, head of Investment at interactive investor, says:
This is a very attractive offer for Tate & Lyle at 595p a share plus 20p a share in dividends, equivalent to a 64% premium prior to its recent surge. The announcement comes at a time when the UK business has been struggling with a weak share price performance and disappointing financial results, leaving the company vulnerable to a takeover.
There are clear synergistic benefits to the deal, with both companies focused on growth in the sugar substitute space. For Ingredion, the acquisition will help boost its presence in Europe too.
Sugar is very much out of fashion. Rising awareness of its negative impact on health combined with the growth in weight loss jabs has shifting consumer preferences towards healthier alternative products instead.
Shares in Ingredion are down 6% over the last month and 9% so far this year.”
Nvidia's Huang draws crowd at chicken restaurant
The sell-off in AI stocks last night didn’t dampen the mood at Kkanbu Chicken restaurant in Seoul lst night, where Nvidia CEO Jensen Huang met with senior executives from SK Group.
Huang and SK chairman Chey Tae-Won drank beer, scoffed fried chicken, and even handed out food to a large crowd who gathered at the scene.
The pair were in a convivial mood, as they celebrated a tie-up between the two companies to advance the development, design and manufacturing of next-generation memory for AI factories.
Updated
European tech firms' shares side
Shares in European companies at the heart of the AI boom are falling sharply at the start of trading.
Chip firms such as Besi – BE Semiconductor Industries – (-4.5%) and ASML (-3.2%) which makes chipmaking machines are among the big fallers on the pan-European Stoxx 600 index, which is down almost 0.9%.
German tech firm Aixtron has dropped almost 6%, while Finland’s telecoms firm Nokia has dropped 5%.
This follows the heavy losses among tech firms in South Korea overnight (see earlier post).
Government bond prices are falling in early trading, pushing up borrowing costs for the US, the UK and eurozone countries.
The yield, or interest rate, on UK 10-year bonds has risen by 3.5 basis points (0.035 of a percentage point) to 4.93%. Shorter-dated bond yields (which rise when bond prices fall) are also up.
FTSE 100 joins sell-off
London’s stock market has dropped at the start of trading, as the missile attacks between Israel and Iran worries the City.
The FTSE 100 index of blue-chip shares has fallen by 42 points, or 0.4%, to 10,326 points at the start of trading.
Jet-engine maker Rolls-Royce is the top faller, down 4.3%, after the company was criticised by the head of United Airlines over a delayed order for Airbus planes.
British Airways parent company, IAG, are down 2.6%.
Oil producers are rallying, though, with BP and Shell both up 1.5%.
UK companies opting to hire temporary workers over permanent staff
Britain’s jobs market cooled rapidly in May after employers cut back on hiring permanent staff, a survey this morning shows.
The monthly Report on Jobs from accountants KPMG and the Recruitment and Employment Confederation, a trade body, showed permanent job placements fell at the fastest pace since July 2025.
German factory orders fell more than expected in April, in a sign that Europe’s largest economy could be faltering as the Iran war drives up costs and weakens demand.
Manufacturing orders fell by 3.8% during April, statistics body Destatis reported this morning.
Orders in the automotive industry fell by 5.3%, while electrical equipment orders slumped by 16.3%.
BoE's Taylor doesn't see need for higher interest rates
One of the Bank of England’s more dovish policymakers has suggested there’s no need to raise UK interest rates to tackle the inflationary impact of the Iran war
Alan Taylor told Sky News – on a trip to the West Midlands – that interest rates are restrictive for the economy at their current level (3.75%), explaining:
I think interest rates don’t need to go higher as they’re quite restrictive at the moment.
I feel comfortable where we are unless we get the worst-case scenario. But I really want to get that sense that this is moving behind us.”
Under the BoE’s worst-case scenario, energy prices surge sharply and remain high, leading to a jump in prices and wage.
Taylor visited the construction site for HS2’s Birmingham Curzon Street station, where he learned that supply chain pressures are filtering into the project, affecting steel, copper, concrete and other raw materials.
He told Sky:
It’s a very volatile world right now.
The markets are being hit by a collision of technology, macroeconomic and geopolitical factors, says Kathleen Brooks, research director at XTB:
As we start a new week, the market is digesting a large upside surprise in US payrolls, tech stock jitters, a huge week for macroeconomic data and an increasingly fragile ceasefire in the US, after Iran and Israel both attacked each other, which could end the truce which has been in place since April. Oil prices have jumped 4% and Brent crude is back above $97 per barrel.
Circuit breakers triggered as South Korea's market tumbles
Major chipmakers led the slump on South Korea’s stock market today.
Samsung Electronics are down 9.2%, and SK Hynix has dropped by 6.4%, helping to pull the KOSPI index down by over 8%. That slump tripping circuit breakers on the Seoul stock market.
Reuters has the details:
Circuit breakers were activated at 0003 GMT, halting trading for 20 minutes for the first time in three months. It was the third time they were triggered this year, and the ninth in history.
The KOSPI had surged through most of 2026, as the AI boom pushed up the value of South Korea’s chipmakers.
Oil jumps 4.8% after Middle East attacks
The oil price is climbing back towards the $100 a barrel milestone, after new missile strikes in the Middle East today.
Brent crude, the international benchmark, has jumped by 4.8% to $97.60 a barrel, after Iran launched missiles at Israel on Sunday in response to Israeli strikes on Beirut’s southern suburbs.
With the fragile ceasefire in the Middle East shattering, hopes that the strait of Hormuz could be reopened, allowing energy flows from the region to resume, are being dashed.
Introduction: Markets hit by Iran crisis and tech sell-off
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Stock markets across Asia-Pacific countries are in retreat today, as investors fear a rise in US interest rates, renewed conflict in the Middle East, and an end to the AI boom.
Major bourses are all in the red; South Korea’s KOSPI index fell by amost 9% at one point, forcing trading to be briefly suspended, while Japan’s Nikkei 225 index is 3.8% lower.
The sell-off followed a painful Friday on Wall Street, where the S&P 500 fell by 2.64%.
Friday’s drop was triggered by a surprisingly strong US employment report, which left many traders concluding that the next move in US interest rates will be up, not down.
Technology stocks have also been pummelled in recent days, on fears that the AI race is turning into a battle over who can raise, and spend, the most money, as ChatGPT and Anthropic prepare to float on the stock market.
Add in renewed conflict in the Middle East today, and it’s a recipe for more losses across global markets…
Kyle Rodda, senior financial market analyst at Capital.com, explains:
Things could get a bit hairier today in the markets after a flare-up in geopolitical tensions over the weekend.
Iran launched strikes on Israel for its attacks on Hezbollah targets in Beirut, leaving a nervous wait for the Israeli response. There is the heightened risk the war escalates again as peace talks between the US and a clearly emboldened Iran stall.
The agenda
-
7am BST: German factory orders
-
4pm BST: US inflation expectations
Updated
