[MARKET ANALYSIS] European bourses entirely in the red, UK Banks hit on political turmoil; US equity futures pull back from ATHs

Newsquawk Staff · 12 May 2026, 09:01 UTC

European bourses (STOXX 600 -0.8%) trade with losses across the board, driven by multiple factors: 1) Iran-US war seemingly not having an end in sight, 2) UK political turmoil, and 3) mixed earnings. Overnight, US President Trump said that the ceasefire is unbelievably weak and reiterated that Iran’s proposal is unacceptable. Further reporting by Axios stated that Trump held a meeting with his national security team to discuss a way forward, which included the possible resumption of military action. This drove energy prices higher and, in turn, weighed on equities globally.
The FTSE 100 is the second-best performing index, behind the SMI, despite the political turmoil. Ahead of the Cabinet meeting, PM Starmer’s Aide Jones indicated that the PM could be about to announce a timetable for his resignation. This came following a Politico report in which as many as 6 ministers could ask for the PM to outline his exit plans at the meeting. As of now, over 81 Labour MPs have called for Starmer to resign, which is officially enough to launch a leadership challenge. UK Banks (Lloyds -3.5%, Barclays -3.9%, NatWest -4.2%) have been hit the hardest, as the political situation affects UK consumer confidence and hence limits spending and borrowing.
European sectors are broadly in the red, with Energy outperforming as WTI and Brent regain the USD 100/bbl and USD 106/bbl respectively. Outside of Banks, Retail sits at the bottom of the pile.
Key movers include Intertek (+6.0%), as EQT increased its offer to GBP 61.077/shr (prev. GBP 58/shr); Munich Re (-4.4%), after its Q1 EPS and Insurance Revenue metric missed estimates; LVMH (+0.9%), with the Co. upgraded to Overweight from Equal Weight at Barclays.
US equity futures are under pressure, pulling back from the ATHs made in Monday’s session.

What our latest note said

US Market Open, 23 Oct, 10:15 UTC · what it led with

US President Trump says the US crushed Iran, and may want to do it a "little more".
Crude benchmarks firmer on ongoing tensions in the Middle East; recent bout of strength comes after the Houthis launched another missile towards Saudi interests.

Read the whole note Free to read.

Newsquawk Daily

Get the next one free, by email.

What moved overnight, where stocks, bonds, currencies and oil stand, and what’s due today. Written by our analysts.

Both market-open notes, EU and US, every weekday. No account needed. Unsubscribe any time.

If you trade

This headline was on the Newsquawk live feed at 08:41 UTC.

Use the Platform opens our news terminal in your browser, with the live headline feed. It’s news, not a broker.

Use the Platform

Free. No signup, no card.

Case studies

Headlines that moved markets

FX headlines from our feed, and what the market did next.

Fed’s Waller (voter) says more rate hikes are likely needed to tame inflation, but there is flexibility over the pace and hikes do not need to be consecutive.
DXY+0.1%
Japan's GPIF didn't discuss allocation at its September meeting, Bloomberg reports.
USD/JPY+0.1%
Japanese FX Official Mimura says they are closely watching to see if markets take the clear message they are giving at face value. Not satisfied with or reassured by recent JPY action.
USD/JPY−0.5%

See all 183

More on this story

Make Newsquawk a preferred source on GoogleSelect this to see Newsquawk more often in Top Stories when you search Google.

More on this story

Related headlines