Lunchtime market roundup: Stocks lower as US-Iran ceasefire fragile

Stock prices in London were lower at midday Wednesday, while US Secretary of State Marco Rubio said negotiations over Iran’s nuclear programme are expected to be ‘highly technical’; meanwhile investors await US ADP figures for May.

The FTSE 100 index was down 33.49 points, 0.3%, at 10,340.21. The FTSE 250 was down 65.43 points, 0.3%, at 23,312.93, and the AIM all-share was down 4.69 points, 0.6%, at 813.63.

The Cboe UK 100 was down 0.4% at 1,028.17, the Cboe UK 250 was down 0.3% at 19,991.37, and the Cboe small companies was down 0.1% at 18,901.61.

In European equities on Wednesday, the CAC 40 in Paris was down 0.5%, while the DAX 40 in Frankfurt was down 1.0%.

The fragile ceasefire in the Middle East appeared increasingly strained. In one of the most serious exchanges of fire since the truce began, Iran launched missiles at Kuwait – where one person was killed, according to the country’s foreign ministry – and at Bahrain, as the US carried out fresh strikes on Qeshm Island.

These developments followed reports that the US military struck an oil tanker heading for an Iranian port.

Negotiations over Iran’s nuclear programme are expected to be ‘highly technical’ and could take months, US Secretary of State Marco Rubio said, adding that such discussions would depend on Iran reopening the Strait of Hormuz.

Meanwhile, another round of Israel-Lebanon negotiations is scheduled to take place in the US later on Wednesday, as exchanges of fire continue between Israel and the Iran-backed Hezbollah, amid renewed threats of escalation in southern Lebanon by Israeli Prime Minister Benjamin Netanyahu.

Brent oil was quoted at $98.07 a barrel at midday in London on Wednesday, up from $94.68 late Tuesday.

The pound was quoted at $1.3450 midday Wednesday, down from $1.3475 on Tuesday. Against the euro, sterling edged down to €1.1573 from €1.1578 a day prior. The euro stood at $1.1616, lower than $1.1638. Against the yen, the dollar was trading at JP¥159.80, compared to JP¥159.89.

Data from Eurostat showed eurozone industrial producer prices rose sharply in April as energy costs surged.

The producer price index for the euro area and the EU rose 4.9% year-on-year in April, up from 2.0% growth in March and slightly ahead of FXStreet-cited consensus of 4.8%.

On a monthly basis, PPI rose 0.6% in the euro area, slowing from 3.4% in March but marginally above expectations of 0.4%. In the EU as a whole, PPI increased 0.7% on-month, easing from a revised 3.1% rise in March.

Excluding energy, prices in total industry rose 0.9% on-month in both the euro area and the EU. On an annual basis, prices excluding energy were up 2.3% in the euro area and 2.1% across the wider EU. Energy prices rose 0.4% on-month and 12.3% on-year in the euro area, and 0.3% on-month and 12.6% on-year in the EU.

Stocks in New York were called mixed. The Dow Jones Industrial Average was called down 0.3%, the S&P 500 index down 0.1%, and the Nasdaq Composite up 0.1%.

The yield on the US 10-year Treasury was quoted at 4.48%, widening from 4.45%. The yield on the US 30-year Treasury was quoted at 4.99%, widening from 4.96%.

Back in the UK, the services sector slipped into contraction in May for the first time in more than a year, according to S&P Global.

The UK services PMI business activity index fell to 49.3 in May from 52.7 in April, dropping below the 50-point threshold that separates growth from contraction for the first time since April 2025. Although the reading was above the flash estimate of 47.9 published on May 1, it was well below the long-run survey average of 54.2.

S&P Global said lower activity levels were linked to subdued consumer spending, particularly in travel, tourism and leisure, as well as reduced business investment amid heightened economic and political uncertainty tied to the Middle East conflict.

Howden Joinery Group topped the FTSE 100, up 3.1%, after agreeing to acquire DIY Kitchens for £390 million.

On the FTSE 250, B&M European Value Retail climbed 16% as the decline in UK sales showed some signs of easing. Ceres Power Holdings rose 3.5% to 841.00p, tracking higher energy prices.

At the other end of the mid-cap index, Ninety One fell 7.3%, with much of its assets under management increase attributable to the £18.3 billion Sanlam mandate.

discoverIE Group lost 2.6% despite reporting ‘robust’ annual results, with sales and profit rising and order growth providing visibility. The Surrey-based designer and manufacturer of electronic components said pretax profit increased 13% to £36.1 million in the year to March from £32.0 million the year prior.

Adjusted pretax profit rose 3.6% to £51.9 million from £50.1 million, though adjusted operating margin declined to 13.8% from 14.3%. Fully diluted earnings per share rose 18% to 29.4 pence from 25.0p. Revenue increased 4.8% to £443.3 million from £422.9 million, or 2% organically, with organic growth improving through the year and reaching 5% in the final quarter.

BP was up 1.7%, supported by higher oil prices, after the Financial Times reported that the firm held advanced talks about selling its UK North Sea assets to Ithaca Energy in a deal worth nearly £2 billion. The talks reportedly fell through in recent weeks, but BP is said to be exploring a potential transaction with other bidders. Ithaca Energy rose 1.9%.

Among smaller caps, Vaultz Capital advanced 6.3% after announcing that Chief Executive Officer Eric Benz has been dismissed with immediate effect and will step down as a director under the terms of his service contract. The company said former non-executive chair Charles Wood has been appointed executive chair with immediate effect.

Gold was quoted at $4,458.59 an ounce, lower than $4,503.10 on Tuesday.

Still to come on Wednesday’s economic calendar are US ADP unemployment data, US MBA mortgage applications, Canada composite PMI, US composite PMI, US ISM services PMI, US factory orders and US EIA crude oil stocks.

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