The FTSE 100 closed higher on Monday, outperforming its European counterparts as oil prices edged lower and investors focused on major US events ahead.
The blue-chip index finished up 37.76 points, or 0.4%, closing at 10,854.32, while the FTSE 250 ended slightly lower at 24,717.48.
The AIM All-Share also made modest gains, closing up 2.08 points, or 0.3%, at 814.04 on the day.
European markets struggled, with Paris’s CAC 40 falling 0.4% and Frankfurt’s DAX 40 shedding 0.1% by the close.
On Wall Street, trading was mixed, with the Dow Jones Industrial Average rising 0.3% while the S&P 500 fell 0.3% and the Nasdaq slipped 0.6%.
Oil prices dipped despite US Treasury Secretary Scott Bessent announcing that an “economic D-Day” had begun against Iran, declaring any country enabling the Islamic republic would become a “global pariah”.
Mr Bessent posted on X that the US had “dismantled Iran’s military capabilities, destroyed nearly 100% of its military factories, and buried its nuclear programme”, though Iranian Deputy Foreign Minister Kazem Gharibabadi responded that the US “narrative doesn’t add up”.
Brent crude for October delivery traded at 92.74 dollars a barrel on Monday, down from 93.53 dollars late on Friday, as markets digested the heated rhetoric.
Susannah Streeter, chief investment strategist at Wealth Club, said there may be “some relief that the threats have moved from military strikes to some form of super sanctions, but there is little confidence that a route to a peace deal will open up any time soon”.
Nvidia’s (NVDA) second-quarter earnings results dominated investor attention this week, alongside personal consumption expenditures data and the Jackson Hole economic summit.
Tom Stevenson, investment director at Fidelity International, said chip maker Nvidia’s second quarter results will provide a further insight into the AI “boom or bubble” question.
Stevenson noted that “Nvidia’s shares trade at roughly the same level as last November” as questions persist over whether vast AI infrastructure investment will be justified by future revenues.
Analysts expect Santa Clara-based Nvidia, the most valuable company in the world, to deliver a chunky “beat-and-raise”, with the scale of outperformance likely to drive share price reaction.
New Federal Reserve chairman Kevin Warsh will attend his first Jackson Hole symposium, delivering his keynote speech on Friday amid expectations of minimal forward guidance.
Citigroup analyst Andrew Hollenhorst said: “Warsh’s discussion on Friday will likely include no explicit guidance and any implicit guidance that the market can react to may be minimal.”
Hollenhorst added that “any acknowledgement of the last two months of cooler core inflation data would be particularly notable” given Warsh’s reluctance to comment on recent economic figures.
On the FTSE 100, Guinness owner Diageo (DGE.L) surged 3% after RBC Capital Markets reiterated an “outperform” rating and 2,000p price target following further consideration of chief executive Dave Lewis’s turnaround proposal.
Diploma gained 0.4% after JPMorgan upgraded the London-based supplier to “overweight” from “neutral”, with analyst Jane Sparrow describing it as a “high-quality compounder, capable of sustaining double-digit EPS growth into the medium term”.
Premier Inn owner Whitbread rose 1.6% after the Treasury announced a review into how business rates are calculated for pubs and hotels in England and Wales, to be led by business rates expert Jerry Schurder.
Transport technology provider Tracsis climbed 4.7% after completing the acquisition of Mistral Data for £48 million and reporting expected revenue of £85.5 million for the financial year ended July 31, a 4.4% increase year-on-year.
The pound traded at 1.3639 dollars on Monday afternoon, up from 1.3625 dollars at Friday’s equities close, while gold rose to 4,670.28 dollars an ounce from 4,605.34 dollars on Friday.