Global financial markets experienced a mixed start to the week as surging oil prices and heightened geopolitical tensions in the Middle East impacted investor sentiment. The FTSE 100 in London edged higher, while US benchmarks like the S&P 500 and Nasdaq Composite hit record highs despite a dip in the Dow Jones. Energy stocks were the primary beneficiaries of the oil price surge, while consumer and mining sectors lagged.
On Monday, London's benchmark FTSE 100 index rose 0.2% to 10,393.85 points, supported by a 1% gain in energy stocks. BP and Shell advanced around 1% each as Brent crude futures climbed 2.4% to $107.84 per barrel. The oil price surge was driven by escalating geopolitical tensions after US President Donald Trump indicated that Iran would need to initiate contact for negotiations, weakening prospects for peace. Banking and defense stocks also advanced by 0.5% and 0.9%, respectively, benefiting from higher interest rate expectations and uncertainty.
In the US, the S&P 500 gained 0.12% to close at 7,173.91, and the Nasdaq Composite added 0.20% to settle at 24,887.10, both reaching intraday and closing record highs. However, the Dow Jones Industrial Average fell 62.92 points, or 0.13%, to 49,167.79, as oil prices and geopolitical uncertainty tempered enthusiasm. West Texas Intermediate settled 2.09% higher at $96.37 per barrel, while Brent crude rose 2.75% to $108.23. Investors remained cautious ahead of a busy week featuring earnings reports from major tech companies like Amazon, Alphabet, Meta Platforms, Apple, and Microsoft, as well as a Federal Reserve policy decision expected to keep interest rates steady.
The market moves reflect a divergence between energy-driven gains and broader caution. Sectors like consumer staples and mining faced headwinds, with UK's Sainsbury falling 3% after a Goldman Sachs downgrade, and precious metal miners slipping 0.3% as gold prices edged lower. Analysts now project 16.1% year-on-year earnings growth for S&P 500 companies, with 81% of reporters beating estimates.
