But let's take a quick look back. In New York, the day had started badly: prices rose at the open, turned red mid-session, and then suddenly reversed course—just as oil prices plummeted like a cryptocurrency after an interview with Elizabeth Warren. Wall Street even ended the day at its highest point, with the S&P 500 index gaining nearly 1%. You weren't dreaming this morning if you looked at the price of Brent crude: the price per barrel fell nearly $10 from the previous day, returning to around $70. This move was triggered shortly after Iran fired a salvo of missiles at the main US military base in Qatar. At first glance, this retaliation for the US bombing of Iranian nuclear sites looked like an escalation. But in reality, it was quickly classified as a “symbolic response.”

In short, Tehran responded for the sake of form, but things did not go very far. Qatar's response reinforced this symbolism. Doha intercepted the missiles fired by Iran, which had sent a warning of its attack to limit casualties, before condemning the firing and threatening to respond in accordance with international law. This was a way of defusing the escalation. The two countries have common interests (they jointly exploit the world's largest gas field) and Qatar has been the mediator and meeting point for negotiators in the Middle East for several months now. Brent’s price drop, despite Iran’s attack on Qatar, reflects market confidence that no major escalation will disrupt oil supplies.

But it's not over yet.

At midnight, Donald Trump made his grand return to his favorite role: the man who ends the fight he himself started, announcing a ceasefire between Israel and Iran.

The belligerents seemed less certain, but the US president suggested that the end of the reciprocal strikes was only a matter of hours away, before confirming early this morning that the ceasefire had now come into effect. This raises two questions. 1: Will the truce be respected? 2: When does Trump sleep?

But the relative calm in the Middle East is not the only reason for the rebound in the stock markets. Yesterday, two members of the US central bank uttered the magic words “rate cut.” Michelle Bowman, vice chair of the Fed, believes that an adjustment (downward, of course) in rates is now possible. For her, the risks to employment now outweigh inflation fears linked to tariffs. For his part, Austan Goolsbee, head of the Chicago Fed, conceded that the economic impact of tariffs is less severe than expected, which could lead to monetary easing. However, Bowman and Goolsbee are considered doves within the US central bank, i.e. Fed members who are most likely to advocate rate cuts. Their statements have shifted the balance slightly in favor of monetary easing at the July meeting, although this scenario remains very much in the minority (the market gives a 77% chance of the status quo, compared with 83% before Bowman and Goolsbee's comments).

Easing tensions in the Middle East + easing rates + harmless statistics = rising equity markets. And this should continue today. In Asia-Pacific, the announcement of a ceasefire pushed India and Australia up 0.9%, Tokyo 1.1%, Hong Kong and Taiwan 2.1% and Seoul 3%. European and US futures are well into positive territory, with sharp gains expected at the open.

Today's economic highlights:

On today's agenda: the Ifo Business Climate Index, Current Assessment, and Expectations in Germany; in the United States, the FHFA House Price Index, Conference Board Consumer Confidence, and the Richmond Fed Manufacturing Index. See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$3,325.51
  • Crude Oil (BRENT): US$68.67
  • United States 10 years: 4.33%
  • BITCOIN: US$105,578

In corporate news:

  • Amazon plans to invest £40 billion in the UK.
  • Chill Brands Group PLC announced an increase in revenue in its delayed financial results.
  • Novo Nordisk received EU approval to update the Ozempic label and terminated its partnership with Hims & Hers over safety concerns.
  • Safilo and Carolina Herrera extended their eyewear licensing agreement until 2031.
  • Stellantis' new CEO Filosa retains his North America role, disappointing investors with no major management changes.
  • Banca Monte dei Paschi di Siena received ECB approval for its acquisition of Mediobanca.
  • Amazon plans to invest $54 billion in Britain over the next three years and is enhancing its premium beauty sector.
  • Tesla faces legal challenges over a fatal crash and scrutiny from NHTSA, while launching its robotaxi service in Austin, Texas.
  • Amgen is expanding development plans for its MariTide weight-loss drug.
  • Omnicom and Interpublic merger approved by US FTC under a consent order.
  • Compass Pathways' experimental depression drug shows promising results in a late-stage trial.
  • Starbucks denies plans for a full sale of its China operations.

See more news from UK listed companies here

Analyst Recommendations:

  • Severn Trent Plc: Citigroup remains neutral recommendation with a price target raised from GBP 25.22 to GBP 28.75.
  • Pennon Group Plc: Citigroup maintains its buy recommendation with a price target raised from 4.97 to GBP 5.39.
  • Vodafone Group Plc: Citigroup remains neutral recommendation with a price target raised from GBP 0.70 to GBP 0.75.
  • Hunting Plc: RBC Capital maintains its outperform rating and raises the target price from GBX 420 to GBX 440.
  • Shell Plc: RBC Capital maintains its outperform rating and reduces the target price from 3800 to GBX 3400.
  • Persimmon Plc: Morgan Stanley maintains its overweight rating and reduces the target price from 1590 to GBX 1560.
  • The Berkeley Group Holdings Plc: Morgan Stanley maintains its market weight recommendation and reduces the target price from 4550 to GBX 4380.
  • Vesuvius Plc: JP Morgan maintains its neutral recommendation and raises the target price from 3.50 to GBP 3.80.
  • Rotork Plc: JP Morgan maintains its overweight recommendation and raises the target price from 3.80 to GBP 3.90.