The strategy, if one can call it that, is to multiply measures and announcements aimed at preserving ample oil and gas supply. I have written about this repeatedly in these columns: time is working against the United States, and Europe too, in this case, because it is upsetting the economic and financial balances and the scenarios built on them. Chief among them is the possibility for central banks to cut rates in order to support the economy. If oil remains perched at elevated levels, economists are predicting a sort of perfect storm that will reverberate through the dynamics of global activity.

Iran has understood this perfectly well and is playing its main card to the hilt. The country cannot compete with the American-Israeli arsenal, but it is capable of hitting its rivals in the wallet by deploying methods that could fairly be described as a form of guerrilla warfare. For now, the White House is failing to contain that disruptive power.

That is why equity indices are running out of steam after showing quite astonishing resilience. Yesterday, Wall Street shed more than 1.5%. The S&P 500, the Dow Jones and the Nasdaq 100 are now down more than 2% in 2026. The Russell 2000, which tracks small caps and is sensitive to changes in policy rates, has meanwhile chalked up a third straight losing session and is now flat since 1 January, having fallen 9% from its record highs at the end of January. Europe is slipping too and erasing its gains for the year. The broad Stoxx Europe 600 index has fallen in five of the past six sessions and is now up just 1.1% in 2026. France's CAC 40, like the US indices, slipped into negative territory over the week.

The future is unpredictable by nature, but current circumstances make it even more so. One event could very well bring an end to tensions in oil supply and reverse sentiment. But for now, the probabilities still point to prices remaining high. At this stage of the week, the USD 100 a barrel threshold for Brent is the tipping point in how risk is perceived. Even though crude has eased slightly over the past few hours, it is still up 21% over one week, 39% over the current month and 67% since 1 January. In the economy, almost everything comes back to oil. That gives a measure of the shock represented by this explosive rally and, to return to the earlier point, the challenges it poses for both political and monetary authorities. The longer it goes on, the worse it gets.

Added to that is the market's unease over private credit. When institutions that usually trumpet their eye-watering performance begin changing the rules of the game unilaterally and start preventing investors from redeeming their money on demand, it is a sign that the system is under unprecedented strain. As a rule, the sector keeps its dirty linen in-house for as long as the pressure remains manageable. Here too, the longer it goes on, the worse it gets.

To venture a little off the beaten macroeconomic path, though not necessarily away from bad news, major multimedia design software publisher Adobe reported earnings last night, and it did not go down well. The stock was down almost 9% in after-hours trading because investors can clearly see that artificial intelligence is threatening the old creative oligopoly. The release landed squarely in the "AI will kill software" column rather than the "you see, everything will be fine" one.

The rest of the trading day will probably take its cue from oil's ups and downs, and therefore from geopolitical headlines. On the macro agenda, several US data points are due, notably January PCE inflation. The figures are starting to look stale and predate the Iranian conflict by some margin, but they are still likely to attract comment with less than a week to go before the Fed's next meeting. The rise in the 10-year US Treasury yield to around 4.27% shows that the market is genuinely worried about the impact the oil spike could have on inflation, and therefore on monetary policy. Traders' expectations for Fed rate cuts in 2026 have shifted from two to three a month ago to zero to one now.

In Asia-Pacific, the modest pull-back in oil allowed indices to limit their losses in the final session of the week. Japan is still down 1.1%, India 1% and South Korea 1.7%, but the markets in Australia, mainland China and Hong Kong are off by only 0 to 0.3%. Western leading indicators are hovering around flat, with a very slight upward bias.

Today's economic highlights:

See the full calendar here.

  • GBP / USD: US$1.33
  • Gold: US$5,092.94
  • Crude Oil (BRENT): US$100.73
  • United States 10 years: 4.27%
  • BITCOIN: US$71,251

In corporate news:

  • Union workers at BP plc's Whiting refinery overwhelmingly rejected the company's final contract offer, citing unfavorable terms and job cuts.
  • Glencore CEO Gary Nagle hopes to revive merger talks with Rio Tinto as coal prices rise, despite previous disagreements on valuation.
  • Rio Tinto suspended operations at its Kennecott copper mine in Utah following a fatal incident involving a contractor.
  • HSBC and Standard Chartered are expected to be among the first recipients of Hong Kong's stablecoin licenses, potentially issued within two weeks.
  • Helios Towers reported better-than-expected annual earnings and announced its first-ever dividend, but shares fell due to oil price volatility and geopolitical tensions.
  • Informa reported strong FY25 results, exceeding expectations, and announced an increased share buyback program while maintaining 2026 guidance despite Gulf tensions.
  • Vesuvius increased its dividend despite a 30% drop in 2025 pretax profit, anticipating recovery in steel and foundry markets in 2026.
  • Volution reported a 47% rise in pretax profit for H1 2026, raised its dividend, and expects full-year earnings in line with consensus despite geopolitical uncertainties.
  • Energean agreed to acquire Chevron's oil stakes in Angola for $260 million, marking its entry into West Africa and aligning with its growth strategy.
  • BE Semiconductor has reportedly received expressions of interest from Lam Research and Applied Materials regarding a takeover and has hired Morgan Stanley to represent its interests, according to Reuters.
  • Ferretti's independent board of directors recommends that shareholders reject KKCG Maritime's offer.
  • Venezuela and Repsol sign new oil agreements.
  • Adobe falls 7.8% after hours following its earnings report and the announcement of its CEO's departure.
  • Meta postpones the launch of its new AI model after concerns about its performance, reveals the NYT.
  • Bytedance gains access to Nvidia's cutting-edge AI chips, according to the WSJ.
  • Amazon plans to move its annual Prime Day sales from July to June, according to Bloomberg.
  • Tesla is converting its investment in xAI into a stake in SpaceX ahead of the IPO, according to Bloomberg.
  • PayPay shares jumped 14% after the IPO.

See more news from UK listed companies here

Analyst Recommendations:

  • Greggs Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 2170 to GBX 2090.
  • Informa Plc: Barclays maintains its overweight recommendation and reduces the target price from GBP 11.20 to GBP 10.40.
  • Hiscox Ltd: Goldman Sachs maintains its buy recommendation and raises the target price from GBX 1681 to GBX 1745.
  • Halma Plc: Oxcap Analytics maintains its overweight recommendation and raises the target price from GBX 4560 to GBX 4600.
  • Persimmon Plc: Morgan Stanley maintains its overweight recommendation and raises the target price from GBX 1600 to GBX 1610.
  • Admiral Group Plc: RBC Capital upgrades to outperform from sector perform with a price target raised from GBX 3100 to GBX 3560.
  • Centrica Plc: Barclays maintains its overweight recommendation and raises the target price from GBP 2.18 to GBP 2.50.
  • Serco Group Plc: Citi maintains its buy recommendation and raises the target price from GBP 3.24 to GBP 3.69.
  • Legal & General Plc: JP Morgan maintains its neutral recommendation and raises the target price from GBP 2.75 to GBP 2.85.
  • Trainline Plc: JP Morgan maintains its underweight recommendation and raises the target price from GBP 2.15 to GBP 2.35.
  • Wizz Air Holdings Plc: Citi maintains its sell recommendation and reduces the target price from GBP 8.10 to GBP 7.50.
  • Easyjet Plc: Citi maintains its buy recommendation and reduces the target price from GBP 6 to GBP 5.40.
  • Shell Plc: Goldman Sachs maintains its buy recommendation and raises the target price from USD 99 to USD 103.