Early market roundup: Stocks mixed amid doubts on US-Iran deal

Stock prices in London were mixed on Tuesday morning amid uncertainty around the US-Iran agreement, as the price of Brent oil was lower.

The FTSE 100 index opened up 3.15 points, marginally higher at 10,433.77. The FTSE 250 was down 64.54 points, 0.3%, at 23,298.25, and the AIM all-share was down 1.18 points, 0.2%, at 804.11.

The Cboe UK 100 was marginally higher at 1,036.39, the Cboe UK 250 was down 0.4% at 20,005.12, and the Cboe small companies was marginally lower at 18,592.71

In European equities on Tuesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.3%.

After Monday’s early optimism failed to translate into sustained gains, sentiment remained restrained.

Investors continue to assess the viability of the interim US-Iran agreement and the practical challenges involved in restoring shipping through the Strait of Hormuz.

Reports suggested the Trump administration is prepared to support the creation of a $300 billion investment fund for Iran if Tehran agrees to a final peace settlement that includes a nuclear agreement.

A senior US official said Washington has discussed sanctions relief and a ‘big $300 billion fund to rebuild their country’, with incentives linked to Iran’s compliance with the memorandum of understanding expected to be formally signed in Switzerland on Friday.

According to people briefed on the talks, the fund would be contingent on a broader settlement, including a 60-day ceasefire extension, the reopening of the Strait of Hormuz and further negotiations on Iran’s nuclear programme.

Brent oil traded at $81.98 a barrel early Tuesday, down from $83.18 late Monday.

US Vice President JD Vance said President Donald Trump could choose to publish details of the preliminary agreement before Friday.

Vance described the memorandum of understanding as ‘about a page and a half’ and a ‘very general’ document. Senior US officials have also indicated that the Strait of Hormuz is expected to reopen on Friday, the same day the deal is due to be signed in Geneva.

The pound was quoted at $1.3409 early Tuesday, lower than $1.3436 at the London equities close on Monday. Against the euro, sterling fell to €1.1564 from €1.1580 a day prior.

The euro traded at $1.1591 early Tuesday, lower than $1.1604 late Monday. Against the yen, the dollar was quoted at JP¥160.32, higher versus JP¥160.18.

Investors were also monitoring developments at the G7 summit in France, where UK Prime Minister Keir Starmer is expected to press allies for tougher action against Russia.

Starmer is due to unveil a new package of sanctions targeting Russia’s so-called shadow fleet and financial networks used to circumvent existing restrictions. The measures will also target vessels involved in transporting banned Russian liquefied natural gas, bringing the number of sanctioned shadow fleet and LNG vessels to more than 600.

Defence stocks were among the strongest performers across Europe. In Frankfurt, Rheinmetall rose 3.6%, while Leonardo gained 1.7% in Milan. In Paris, Thales and Safran added 2.2% and 1.6%, respectively.

In London, BAE Systems topped the FTSE 100, followed by Rolls-Royce, up 2.2%, and Babcock International, which gained 1.8%.

More broadly, UK investors remained in wait-and-see mode ahead of key UK inflation data on Wednesday and the Bank of England’s interest rate decision on Thursday.

On the FTSE 250, Rathbones slumped 17% after revealing the findings of a skilled person review conducted following engagement with the Financial Conduct Authority.

The wealth manager said the review identified areas requiring improvement in its UK wealth management business, including Consumer Duty implementation and elements of compliance and oversight. Rathbones plans a two-year remediation programme, a review of certain client outcomes and a temporary pause on onboarding new clients requiring enhanced due diligence.

The restrictions affect around 4,700 clients, or roughly 4% of its client base. Rathbones expects associated costs of around £60 million, net of insurance recoveries, over the next two years.

Separately, the company will stop charging investment management fees on cash held in discretionary portfolios from July 1, reducing 2026 underlying pretax profit by around £9 million. It maintained its dividend policy and said its previously announced £20 million share buyback will commence shortly.

Sports Direct owner Frasers Group fell 5.7% after RBC downgraded the retailer to ’underperform’ from ’sector perform’ and lifted its price target to 750 pence, while electricals retailer Currys rose 1.9% after RBC upgraded the stock to ’outperform’ from ’sector perform’ and increased its target price to 180p.

Among smaller caps, Gulf Marine Services gained 5.6% after saying all vessels temporarily evacuated from Gulf locations due to geopolitical tensions have returned to service under their existing contracts.

The company reiterated its 2026 adjusted Ebitda guidance of $105 million to $115 million, while continuing to assess the full financial impact of the disruption.

Everyman Media Group plunged 10% after disclosing that its board is discussing a potential AIM delisting with shareholders. Directors controlling 45.6% of the company support the proposal, while additional investors representing at least 11% of shares are also believed to be in favour.

The premium cinema operator separately reported strong trading for the 21 weeks to May 28, with admissions rising 23% to 2.2 million, revenue increasing 27% to £58.5 million and adjusted Ebitda climbing 45% to £9.4 million. Market share improved to 6.7% from 5.9%, while average net debt fell 24% to £17.6 million.

In Asia on Tuesday, the Nikkei 225 index in Tokyo closed up 0.1%, after the Bank of Japan raised interest rates by 25 basis points to 1.0%, as expected.

The Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong ended 1.7% lower. The S&P/ASX 200 in Sydney closed marginally higher.

In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.9%, the S&P 500 up 1.7% and the Nasdaq Composite up 3.1%.

The yield on the US 10-year Treasury was quoted at 4.46%, narrowing from 4.47%. The yield on the US 30-year Treasury was quoted at 4.96%, unchanged from Monday.

Gold was quoted at $4,324.10 an ounce early Tuesday, down from $4,354.54 on Monday.

Back in the UK, attention was also turning to Thames Water after reports suggested the utility is edging closer to temporary nationalisation.

Environment Minister Emma Reynolds is understood to have written to regulator Ofwat warning that a proposed £10 billion rescue package from creditors could place an ‘undue burden’ on customers. The consortium-led plan would inject £10 billion into the heavily indebted utility in exchange for a waiver on future sewage-related fines for four years.

Thames Water, which serves around 16 million customers and carries nearly £20 billion of debt, is seeking the deal to avoid government intervention after years of financial and environmental difficulties.

Still to come on Tuesday’s economic calendar, the eurozone and Germany release ZEW economic sentiment surveys. In the US, investors will monitor building permits, export and import prices, and the Redbook index, while the latest Federal Open Market Committee meeting gets under way.

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