London open: FTSE dips as Trump's Iran deadline looms

7th Apr 2026 07:56

(Sharecast News) - London stocks dipped in early trade on Tuesday, unable to hold on to opening gains as the deadline for Trump's ultimatum to Iran loomed, after the US president doubled down on his threat to destroy the country's energy and transport infrastructure if a deal is not reached to end the conflict.

At 0840 BST, the FTSE 100 was down 0.2% at 10,413.14. Brent crude was up 1.5% at $111.37 a barrel and West Texas Intermediate was 2.3% higher at $114.95.

Speaking at a White House press conference on Monday, Trump said Iran could be taken out by the US in "one night and that night could be tomorrow night" if it does not make a deal and reopen the vital strait of Hormuz.

The US president was referring to the deadline he has given Iran to reopen the strait of Hormuz, through which around 20% of the world's oil supply travels. If Iran does not reopen the strait by 20:00 Eastern Time on Tuesday (01:00 BST on Wednesday) Trump has threatened major attacks against the country's energy and transport infrastructure.

In response to a question about whether he was winding down the war or escalating it, Trump doubled down on his threat to take out Iran's energy infrastructure. "I can't tell you. I don't know. It depends what they do," he said. "This is a critical period.

"They have until tomorrow and we'll see what happens. I can tell you they're negotiating we think in good faith. We're going to find out. We're getting the help of some incredible countries that want this to be ended because it affects them also."

One reporter asked if in order for Iran to successfully meet the US deadline on Tuesday they have to make a deal, open the strait or both. Trump said: "We have to have a deal that's acceptable to me. And part of that deal is going to be we want free traffic of oil and everything else."

Trump went on to threaten the decimation of every bridge in Iran.

"We have a plan - because of the power of our military - where every bridge in Iran will be decimated by 12 o'clock tomorrow night. Where every power plant in Iran will be out of business, burning, exploding and never to be used again. I mean complete demolition by 12 o'clock and it will happen over a period of four hours if we want it to," he said.

Investors were also mulling a report by Axios over the weekend suggesting that the US and Iran were discussing terms for a 45-day ceasefire, although prospects for an agreement were understood to be slim.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said equity markets moves suggest investors are positioning carefully rather than fully pricing in a worst-case scenario.

"Either way, today has the potential to be one of the most volatile trading sessions since the conflict began, with any headlines likely to drive meaningful swings across global markets," he said.

He added: "Oil prices are creeping higher this morning, hovering near levels not seen since 2022. Oil has effectively become the key transmission channel for broader market risk, with moves now feeding directly into everything from bond yields to equity sentiment and even gold prices as investors try to gauge how far the conflict could hit global energy supply.

"With Iran warning it could escalate attacks on Gulf energy infrastructure if the US targets civilian assets, oil is increasingly acting as the primary driver of volatility heading into today's deadline."

Corporate news was thin on the ground, but shares in Scottish Mortgage Investment Trust rallied after Reuters reported that SpaceX - in which it has a significant holding - outlined details of its IPO at a meeting with ‌its team of bankers on Monday night.

According to Reuters, SpaceX told them it plans to earmark a large portion of shares for retail investors and will host 1,500 of them at an event in June following the IPO roadshow launch.

Bill Ackman's Pershing Square was in focus after offering to buy Universal Music Group for around €55bn.

Fund administration services firm JTC ticked marginally higher as it reported a 25% jump in full-year revenues and a 22.4% increase in underlying earnings.

Elsewhere, precision engineering group Hunting rose after saying it had won $63.5m in orders to deliver its titanium stress joint products for a new offshore oil development in Guyana.