14th Jul 2026 06:54
(Alliance News) - Stocks in London are set to open marginally lower on Tuesday as further US-Iran fighting pushed oil prices sharply higher ahead of US inflation data.
IG says futures indicate the FTSE 100 to open down 4.0 points, marginally lower, at 10,494.29 on Tuesday. The index of London large-caps closed marginally higher at 10,498.29 on Monday.
US President Donald Trump said the US would again strike Iran "hard" as the military launched a fresh wave of attacks for the third consecutive night and reimposed a blockade on Iranian ports.
Shortly afterwards, US Central Command said strikes had begun at 2045 GMT, adding they would "continue imposing a heavy cost on Iranian forces and degrade their ability to attack innocent civilians and commercial shipping in the Strait of Hormuz".
Centcom also said the renewed blockade would begin at 2000 GMT on Tuesday.
In a post on Truth Social, Trump declared the US would be known as "the guardian of the Hormuz Strait" and said Washington would levy a 20% fee on all cargo passing through the waterway.
Iranian Foreign Minister Abbas Araghchi swiftly mocked the proposal, writing on X that "POTUS is absolutely right" that whoever guarantees safe passage should be compensated, but adding that Tehran would charge less.
Brent oil was quoted at USD84.15 a barrel early Tuesday, higher than USD79.42 late Monday.
Despite the renewed escalation, Trump insisted a deal with Tehran remained within reach.
"Yeah, I think a deal is possible. Sure, I do," he told reporters in the Oval Office. "We had a deal with them two days ago and then they said, 'Oh we can't make that deal. We have to negotiate it further.'"
Sterling was quoted at USD1.3366 early Tuesday, lower than USD1.3378 at the London equities close on Monday. Against the euro, sterling fell to EUR1.1727 from EUR1.1733 a day prior.
The euro traded at USD1.1393 early Tuesday, lower than USD1.1400 late Monday. Against the yen, the dollar was quoted at JPY162.28 versus JPY162.32.
Back in the UK, Chancellor Rachel Reeves is expected to defend her economic record ahead of Andy Burnham's incoming government, saying Britain has "beaten the odds" under her stewardship.
In her likely final Mansion House speech, Reeves is expected to argue that the UK must "maintain the credibility we have earned", signalling that any incoming administration must retain market confidence.
She is expected to tell business leaders: "Because of the choices I have made, I'm proud to report that the British economy is strong."
Reeves will also highlight that Britain recorded the fastest economic growth in the G7 at the start of the year, while borrowing fell from 5.2% to 4.3%, its lowest level in six years. She is also expected to point to rising investment, productivity and wages, alongside falling NHS waiting lists and measures aimed at reducing child poverty.
In the US on Monday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.3%, the S&P 500 down 0.8% and the Nasdaq Composite down 1.6%.
Federal Reserve Governor Christopher Waller said the US central bank should be prepared to raise interest rates in the near term if inflation continues to run above target.
"When inflation is well above its target and the labour market is near full employment and stable, any serious policy rule calls for raising the policy rate to bring down inflation," Waller said during a speech in Rome.
He added that Tuesday's consumer price index report would be key. "If we get another hot reading on core inflation this week, then the Fed will need to consider tightening monetary policy in the near term," he said.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.7%. In China, the Shanghai Composite rose 0.5%, while the Hang Seng index in Hong Kong gained 0.3%.
Supporting sentiment, China's trade surplus widened in June, according to the General Administration of Customs.
The surplus increased to USD125.62 billion from USD105.43 billion in May, beating the FXStreet-cited consensus forecast of USD121.00 billion. Exports climbed 27% on-year, accelerating from 19% in May, while imports rose 36%, also ahead of expectations.
The S&P/ASX 200 in Sydney closed marginally lower.
Gold was quoted at USD4,030.80 an ounce early Tuesday, higher than USD4,015.30 on Monday.
Back in the UK, retail sales growth slowed in June as shoppers favoured online purchases over visits to stores during the heatwave, according to data from the British Retail Consortium and KPMG.
Total retail sales rose 1.9% on-year, easing from 3.7% growth in May and below the 3.1% increase recorded in June 2025. Food sales rose 2.8%, slowing from 3.9% in May, while non-food sales increased 1.2%, down from 3.5% the previous month.
In Tuesday's corporate calendar, Ashmore, Hunting, Robert Walters, IntegraFin Holdings and Watches of Switzerland are among those issuing trading statements.
In the economic calendar on Tuesday, Germany releases wholesale prices, and Switzerland publishes producer and import prices. In the UK, Bank of England Governor Andrew Bailey is due to speak.
In the US, consumer price inflation and the Redbook index are scheduled.
By Eva Castanedo, Alliance News senior economics reporter
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