London and European stocks are braced for a lower open on Wednesday following a dramatic overnight escalation in US-Iran military tensions.
FTSE 100 futures are pointing down by around 30 points, erasing the modest gain of just over 14 points recorded in the previous session.
The index had closed on Tuesday at 10,665.88, a level that now looks increasingly fragile given the scale of geopolitical events unfolding overnight.
US forces launched strikes against more than 80 targets in Iran, hitting command-and-control networks, coastal radar sites, and anti-ship missile capabilities.
The strikes also targeted more than 60 Islamic Revolutionary Guard Corps small boats, in what represents a significant escalation of military action in the region.
Washington said the operations were a direct response to recent attacks on commercial shipping in the Strait of Hormuz, one of the world’s most critical oil chokepoints.
The US simultaneously revoked a waiver that had previously allowed Iran to restart oil exports, compounding pressure on global energy supply chains.
Iran condemned the American measures as a breach of the existing ceasefire agreement and vowed a “decisive” response, raising fears of further regional instability.
Brent crude jumped 3.3% to $76.64 in early trading, reflecting the market’s immediate concern over potential disruption to Middle Eastern oil flows.
The mood was already fragile after a difficult Wall Street session, where a broad selloff in semiconductor stocks overshadowed an early high for the Dow Jones.
The Nasdaq led declines on Tuesday, falling 1.2%, while the S&P 500 slipped 0.5% and the Dow Jones retreated 0.3%.
Newly added Nasdaq 100 constituent SpaceX endured a difficult first day in the index, with shares tumbling 6.8% as investors took profits following last month’s high-profile IPO.
Asian markets are trading mixed in the wake of the US strikes, with South Korea’s Kospi falling 4.6% to a six-week low amid heightened regional anxiety.
The Hang Seng bucked the trend, rising 3.1%, driven by strong performance from Chinese technology giants providing a rare bright spot in an otherwise unsettled session.