The FTSE 100 (^FTSE) and European stocks are set to start the week lower on Monday morning as the war in the Middle East enters its fifth week.
Markets in Asia also headed lower overnight, on concerns that higher crude oil prices will weigh on economic growth, after Iran-backed Houthi rebels in Yemen joined the conflict by striking Israel over the weekend.
Meanwhile, Iran threatened to expand retaliatory strikes against universities and the homes of US and Israeli officials.
President Donald Trump said in an interview with the Financial Times on Sunday that he could “take the oil in Iran” and possibly seize its major fuel hub of Kharg Island.
When asked about Iranian defence on the island he said: “I don’t think they have any defence. We could take it very easily.”
“Markets spent a month pricing a short, contained conflict,” said Hebe Chen, senior market analyst at Vantage Global Prime. “That wishful optimism has now broken with the Houthis’ entry over the weekend. The playbook is being rewritten from this week as prolonged war risk becomes increasingly credible.”
-
London’s benchmark index (^FTSE) is set to open around 0.3% lower.
-
Germany’s DAX (^GDAXI) is set to slip 0.6% and the CAC (^FCHI) in Paris will fall 0.2% at the start of trading.
-
The pan-European STOXX 600 (^STOXX) will also headed into the red.
-
Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red.
-
The pound was 0.1% higher against the US dollar (GBPUSD=X) at 1.3273.
Follow along for live updates throughout the day:
LIVE 2 updates
Download the Yahoo Finance app, available for Apple and Android.