Brent Oil Falls 2.5% as Trump Delays Iran Decision

Brent crude oil dropped 2.5% on Friday after President Trump said he would decide within two weeks whether the US will strike Iran, easing immediate pressure on oil markets. European stocks opened higher, with EUROSTOXX 50 futures up 0.7% and FTSE futures up 0.3%, supported by the pullback in energy prices. In Asia, South Korea’s KOSPI rose 1.1% after the new president announced a stimulus plan, while Japan’s core inflation data kept focus on potential rate hikes later in the year.

Equities

The FTSE 100 fell 0.6% on Thursday, closing at a two-week low as investors reacted to steady interest rates from the Bank of England and ongoing tensions between Israel and Iran. A stronger pound also weighed on the index. The FTSE 250 dropped 1%.

Energy stocks were among the few gainers. Shell rose 1.4% and BP climbed 1.2%, supported by a rise in Brent crude oil, which traded near $78 a barrel.

Hays dropped nearly 10% after warning it would miss its annual profit target, citing weaker hiring conditions in several markets. The stock was the biggest faller on the FTSE 250. Among other notable moves, Persimmon fell 3.4% and United Utilities lost 2.3% as both stocks went ex-dividend.

Elsewhere, the travel and leisure sector dropped 2.3%, while personal goods stocks were down 4%. Miners also came under pressure, with industrial metals shares falling 2.5% as copper prices edged lower. The Bank of England, while holding interest rates at 4.25%, noted increased risks to the UK economy from high energy prices and a softening labour market.

In the US, the S&P 500 futures fell by nearly 1% during a public holiday closure, as investors remained cautious over the possibility of US military action alongside Israel. President Donald Trump’s ambiguous comments on a potential strike against Iran added to uncertainty. Wall Street trading resumes Friday.

Oil-linked stocks have also been in focus in the US. ExxonMobil gained 1.1% in pre-market trade following the uptick in crude. Meanwhile, tech shares looked set to open lower, reversing some recent gains.

The Federal Reserve kept rates unchanged on Wednesday, holding its projection for two rate cuts this year. Fed Chair Jerome Powell warned that tariffs introduced by the Trump administration would likely contribute to “meaningful” inflation ahead.

Forex & Commodities

The dollar held steady on Thursday, supported by demand for safe-haven assets as tensions continued between Israel and Iran. The dollar index was flat at 98.9, though it was on track for a 0.8% gain this week—its strongest weekly performance since February. Against the yen, the dollar rose 0.2% to 145.56. It also gained 1% against the Norwegian crown after the Norges Bank surprised markets with a 25 basis point rate cut. Despite the move, the crown remains one of the year’s top performers against the dollar, up around 11%. The euro was slightly lower at $1.1473, while the pound, initially weaker after the Bank of England kept rates unchanged, recovered most of its losses.

The Swiss franc strengthened against the dollar after the Swiss National Bank cut interest rates to zero, as expected. The Bank of England left UK rates on hold at 4.25%, highlighting risks from higher energy prices and a softer labour market. Fed Chair Jerome Powell, meanwhile, warned that US tariffs introduced by President Trump would raise inflation, although the Federal Reserve kept rates unchanged and maintained projections for two cuts later this year. Traders are now watching the Fed’s October meeting as a possible turning point for rate policy.

Gold prices dropped 0.5% to $3,355.49 an ounce on Friday and were down 2.2% for the week. Analysts at ANZ said stronger US yields and dollar strength were weighing on prices, while gold’s appeal as a hedge was tempered by reduced expectations of Fed rate cuts. Platinum, despite falling 1.5% to $1,287.47, remained on track for a third weekly gain.

Brent crude slipped $1.89 to $76.96 a barrel after the White House delayed a decision on possible US involvement in the Israel-Iran conflict. Still, Brent was up 3.8% on the week. US WTI crude for July rose 0.7% to $75.67, while the August contract added 0.2%.