Stocks in London are set for a modestly higher start on Friday as investors continue to monitor developments in the Middle East while awaiting key US employment data that could influence interest rate expectations.
The FTSE 100 is expected to open around 12 points higher after closing 0.3% higher at 10,360.32 on Thursday, with markets showing resilience despite fresh geopolitical tensions.
Attention remains focused on the Middle East after reports of renewed strikes in Lebanon emerged only hours after Israel and Lebanon agreed to implement a ceasefire framework. The agreement is dependent on a cessation of attacks by Hezbollah, although the Iran-backed group has rejected the deal, highlighting the fragility of any potential de-escalation.
US President Donald Trump struck a cautiously optimistic tone, suggesting progress had been made in efforts to reduce tensions and indicating he would be willing to meet Iran’s new supreme leader should negotiations advance towards a broader peace agreement.
Oil markets remain sensitive to developments in the region, with Brent crude edging higher to US$95.40 per barrel as traders assess the balance between ongoing conflict risks and hopes for a diplomatic breakthrough.
On Wall Street, the Dow Jones Industrial Average surged 1.7% on Thursday, while the S&P 500 gained 0.4%. The Nasdaq finished broadly flat as investors weighed strong economic data against concerns over future interest rates and geopolitical uncertainty.
In Asia, trading was more subdued. Japan’s Nikkei fell 1.2%, Hong Kong’s Hang Seng dropped 1.0% and Australia’s ASX 200 declined 0.7%, while Chinese markets managed modest gains.
Investors will now turn their attention to the release of US non-farm payrolls data later today, one of the most closely watched economic indicators globally. The figures are expected to provide further clues on the strength of the US economy and the likely path of Federal Reserve monetary policy.
In the UK, markets will also digest the latest Halifax house price data and retail footfall figures, which showed some improvement in consumer activity during May after a particularly weak April.
Meanwhile, gold eased slightly to US$4,444 per ounce as demand for safe-haven assets moderated following recent gains.
With geopolitical developments, central bank expectations and economic data all competing for attention, investors are likely to remain cautious heading into the weekend.
