![\"Uncertainty:](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/06\/99645257-0-image-a-1_1750698832818.jpg\")
<\/p>\nInvestors are braced for days of turmoil as conflict in the Middle East rattles global markets.<\/p>\n
Oil spiked higher and sterling fell to a five-week low against the US dollar early yesterday as the world awaited Tehran\u2019s response to the US bombing of Iran\u2019s nuclear sites.<\/p>\n
But crude gave up its gains \u2013 dropping from above $81 a barrel to around $76 later in the session \u2013 while the pound rose back towards $1.35, having earlier slipped as low as $1.3371.<\/p>\n
The initial sell-off in the pound came as nervous investors piled into the relative safety of the greenback.<\/p>\n
European stock markets drifted slightly lower, with the FTSE 100 down 0.2\u00a0per cent in London, the DAX 0.4\u00a0per cent lower in Frankfurt and the CAC falling 0.7\u00a0per cent in Paris.<\/p>\n
On Wall Street, the Dow Jones rose 0.6\u00a0per cent and the S&P 500 was up 0.7 per cent.<\/p>\n
<\/p>\n
Uncertainty: Oil spiked higher before giving up its gains – dropping from above $81 a barrel to around $77 later in the session<\/p>\n
The mood was calmer than many feared, even as Donald Trump warned of \u2018regime change\u2019 in Iran and Tehran targeted US bases in Qatar and Iraq.<\/p>\n
\u2018It\u2019s at times like these that investors must wish they had some kind of crystal ball,\u2019 said AJ Bell investment director Russ Mould.<\/p>\n
Matthew Ryan, head of market strategy at Ebury, said that while market moves \u2018have been relatively contained\u2019, investors remain \u2018on edge\u2019.<\/p>\n
He added: \u2018All eyes are on the extent of the retaliation from Iran, whether through further missile and drone strikes on Israel or a blockade of the strait of Hormuz.\u00a0<\/p>\n
Investors appear to be clinging on to hopes of de-escalation.<\/p>\n
\u2018At this stage, markets are in the dark as to where we go from here.\u00a0<\/p>\n
‘An escalation would be greeted with another bout of risk aversion, as investors would price in rising geopolitical uncertainty, higher oil prices and possible supply-chain disruption.\u00a0<\/p>\n
‘The US dollar would remain well placed in this environment.\u2019<\/p>\n
Analysts at Morgan Stanley noted that market sell-offs caused by geopolitical events are often brief.\u00a0<\/p>\n
\u2018History suggests most geopolitically-led sell-offs are short-lived\/modest,\u2019 strategist Michael Wilson wrote. \u2018Oil prices will determine whether volatility persists.\u2019<\/p>\n
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