Oil traders went home on Friday braced for another week of Gulf risk and woke up to a little diplomacy instead. Indirect talks between the United States and Iran in Doha have moved on to how the Strait of Hormuz might reopen, and Brent crude has dropped about 3 per cent to around $110 a barrel. Then, minutes before London’s traders reached their desks, Iran’s Revolutionary Guard said two tankers had hit mines in the same waterway. That is the week in miniature: hope at the negotiating table, danger in the water, and markets trying to price both at once.
The 60-Second Market View
Wall Street ended a bruising week badly. The S&P 500 fell 1.82 per cent on Friday to 7,580.07, the Nasdaq Composite dropped 2.86 per cent to 25,437 and the Dow lost 1.09 per cent to 51,770. Chip makers bore the brunt after Amazon’s and Intel’s results, and the VIX volatility index jumped almost 13 per cent to 19.4. The FTSE 100, light on technology and heavy on energy and banks, finished flat at 10,729.78.
This morning the tone is calmer. S&P 500 futures are up about 0.5 per cent and Nasdaq 100 futures nearly 1 per cent, helped by cheaper oil. Gold is steady near $3,900 an ounce, sterling is around $1.339 and the dollar is little changed. The week ahead is enormous: the US midterm elections on Tuesday, a fifth of the S&P 500 reporting results, and the US jobs report on Friday.
What Happened Overnight?
Asia was mixed but mostly firmer. South Korea’s KOSPI jumped about 2.9 per cent after the country’s October exports rose by more than 90 per cent from a year earlier to a record of around $115 billion, with semiconductor shipments more than tripling. Shanghai gained about 1.2 per cent and Hong Kong 0.6 per cent, while Japan’s Nikkei edged up 0.2 per cent. Taiwan slipped 0.3 per cent and Australia lost 0.6 per cent. India looked set for a strong start, with lower oil a direct relief for a big energy importer.
The Korean figures are worth pausing on. Last week the market punished the companies spending on AI, yet the companies selling the chips are reporting extraordinary demand. Those two things can both be true. The question for investors is whether the spenders keep writing the cheques, not whether the demand exists today.
China’s official manufacturing survey, released over the weekend, fell back to 49.3 in October from 50.1, below the 50 line that separates growth from contraction. Seven OPEC+ producers also agreed on Sunday to keep their output targets unchanged for December, which barely registered next to the news from Doha.
The Big Story: Oil Falls on Talks, but the Strait Is Still Dangerous
The talks in Doha, run through Qatari mediators, are now in their third day. According to reports from the negotiations, Iran has offered to reopen the Strait of Hormuz within two days in return for sanctions relief, the release of frozen assets and a reduced US military presence in the region. Progress appears to be on shipping rather than on Iran’s nuclear programme, where the gaps remain wide, and US Secretary of State Marco Rubio has kept his warnings firm.
Markets did not wait for a deal. Brent has fallen about $3.40 to around $110 and US crude about $3.30 to roughly $101, the first proper sign in weeks that traders are willing to price in an end to the disruption rather than more of it. Remember how much of the oil price is a risk premium. A barrel does not cost more to pump because a strait is closed; it costs more because buyers fear they cannot get it. When that fear eases, prices can fall quickly.
The Revolutionary Guard’s claim this morning that two tankers struck mines after taking an unauthorised route through the strait is a sharp reminder of how fragile that hope is. The details have not been independently confirmed, and early UK reports referred to a distress call about a projectile strike. If the claim stands up, insurers and shipowners will not rush back just because diplomats are talking, and oil may give back some of its fall.
The second-order effects run well beyond the oil market. Cheaper energy eases the pressure on inflation, which matters a great deal with the Federal Reserve holding rates at 3.75 to 4 per cent and markets pricing a strong chance of a hike in December. It matters for the UK too, where the 10-year gilt yield sits near 5.29 per cent, above the levels seen in the 2022 mini-Budget crisis, and for importers such as India, Japan and the eurozone. A lasting fall in oil would be the best news bond markets have had in months.
What to watch is simple to state and hard to predict: whether ships actually start moving through Hormuz. Talk moves prices for a day or two. Tankers moving without incident would move them for months.
FX
Currencies are quiet after the weekend. The dollar index is near 101.9, EUR/USD is around 1.118 and sterling is close to $1.339. USD/JPY is near 157.8, with the yen still weak despite the Bank of Japan’s more hawkish tone last week. Lower oil should help the currencies of energy importers at the margin, and the euro and the yen are the obvious candidates if the talks hold. EUR/GBP is around 0.834.
Equities
The bounce in US futures looks like relief rather than conviction. Hedge funds cut their exposure to stocks last week at one of the fastest rates in a decade, with chip and memory names hit hardest, and the Nasdaq has just had its worst month since early 2025. Heavy selling like that can leave room for a sharp rebound, but it also shows how nervous big money has become about AI spending.
In London, lower oil is a mixed blessing. It is a headwind for BP and Shell, two of the FTSE 100’s largest companies, but a help for airlines, retailers and anything sensitive to consumer spending and interest rates. Europe’s indices should open with a firmer tone if US futures hold their gains.
Bonds
The US 10-year Treasury yield is around 4.93 per cent and the two-year near 4.60 per cent, high because the Fed is debating whether to raise rates again rather than cut. The 10-year gilt yield is about 5.29 per cent and the German Bund near 3.32 per cent. If oil keeps falling, bond yields have room to ease, especially at the short end where inflation fears do the most damage.
Commodities
Brent is around $110 and US crude just under $101 after falls of about 3 per cent. Gold is near $3,900 an ounce, roughly flat, and well below the levels above $5,000 seen earlier this year after a stronger dollar and higher yields took the shine off. Silver has climbed back to about $50 after testing lower levels last week. Copper is little changed around $6.51 a pound.
Crypto
Bitcoin is near $78,300, up slightly. It has traded like a high-risk technology stock in recent weeks, so it will probably take its lead from the Nasdaq and the election rather than from anything specific to crypto.
Today’s Economic Calendar
09:00 Eurozone final manufacturing PMI for October. Confirms whether Europe’s factories are coping with high energy costs; a downward revision would weigh on the euro.
09:30 UK final manufacturing PMI for October. A guide to how British industry is handling expensive energy and borrowing; sterling and gilts will notice any surprise.
14:30 US cash market open. The first real test of whether Friday’s chip sell-off has run its course.
15:00 US ISM manufacturing index for October. The prices-paid component matters most, as it feeds straight into the debate over a December Fed hike.
All day Headlines from the US–Iran talks in Doha and any confirmation of the tanker incidents in Hormuz. These are today’s biggest swing factor for oil.
Levels Traders Are Watching
These are reference points, not predictions or targets. For Brent, $110 is the round number in play this morning and Friday’s settlement near $113.40 is the level a failed peace story would send it back towards. For the S&P 500, Friday’s close at 7,580 is the line; futures near 7,650 show where the bounce starts. Gold is sitting on $3,900, with $4,000 the obvious ceiling. Sterling is just below $1.34, and the 10-year gilt yield near 5.30 per cent is the level the UK market keeps coming back to.
Where This Leaves Traders
The balance this morning tilts cautiously towards relief. Cheaper oil, a firmer Asia and a bounce in US futures all point the same way, and after a week of forced selling it would not take much good news to lift prices. But this is relief built on talks rather than ships, and the tanker claim from the Strait is exactly the kind of headline that can reverse it before lunch.
What would change the view is easy to list. A confirmed mine strike, or Doha talks breaking down, would put oil straight back above Friday’s close and hand the pressure back to bonds and stocks. A strong ISM prices index today, or a hot jobs report on Friday, would revive talk of a December Fed hike regardless of oil. On the other side, tankers moving through Hormuz and steady US results from the big tech names would turn a relief rally into something more durable.
The markets that tell the story today are Brent crude, US Treasury yields, the Nasdaq 100, the FTSE 100’s energy giants and USD/JPY. The opportunity for patient traders is that big swings driven by headlines often overshoot in both directions. The risk is a week packed with events that can each move the market on their own, so position size matters more than usual. For beginners, the lesson is that oil prices carry a large fear premium: when the fear fades, prices can fall fast, and when it returns they can jump just as quickly.
If you want to understand how you would handle a week like this, with an election, a jobs report and a war in the headlines at once, the Samuel & Co Trading Trader Assessment is a good place to start. It shows where your strengths are, where your discipline might crack under pressure and what to work on next.
