The FTSE 100 ended the week on a subdued note, slipping 16.68 points, or 0.2%, to close at 10,409.28 on Friday as hopes for a US-Iran peace deal hung in the balance, with President Donald Trump declaring he was making a “final” decision on whether to strike an agreement.
The blue-chip index fell 0.3% over the week, while the mid-cap FTSE 250 bucked the trend, rising 100.85 points, or 0.4%, to 23,425.77, a weekly gain of 2.1%. The Aim All-Share also advanced, adding 7.62 points, or 0.9%, to 821.25, climbing 3.3% across the five sessions.
In Europe, the CAC 40 in Paris edged down 0.1% and the DAX 40 in Frankfurt closed 0.1% higher. Across the Atlantic, Wall Street saw gains: the Dow Jones Industrial Average rose 0.7%, the S&P 500 added 0.3%, and the Nasdaq Composite firmed 0.2%.
Iran deal uncertainty weighs on oil and lifts bond markets
President Trump posted on social media that he would meet in the Situation Room to make a “final determination” on a peace deal with Iran. He demanded that Tehran agree never to possess nuclear weapons and to open the Hormuz shipping lanes. Trump added that Iran “will complete the immediate removal” of mines in the Strait of Hormuz and that the US naval blockade of Iranian ports “will now be lifted”, allowing oil and other tankers to start moving. It remained unclear, however, whether Iran had assented to these terms or whether the blockade had already been lifted ahead of the president’s decision.
US Vice President JD Vance had earlier indicated that Washington and Tehran were close to agreeing a deal to extend their ceasefire in the Middle East war, though the breakthrough still required Trump’s approval.
The prospect of a detente pushed Brent crude lower. July delivery futures traded at $91.62 a barrel on Friday, down from $94.57 at the close of London equities on Thursday. The yield on the US 10-year Treasury narrowed to 4.43% from 4.46%, hovering near three-week lows, while the 30-year Treasury yield trimmed to 4.97% from 4.99%. Reports of a tentative peace agreement helped ease concerns over inflation and interest rates.
Currency, gold and central bank signals
The pound strengthened against the dollar, trading at $1.3479 on Friday afternoon, up from $1.3435 on Thursday. Sterling also firmed against the euro to €1.1543 from €1.1530. The euro gained against the greenback to $1.1680, compared with $1.1653, while the dollar weakened against the yen to 159.15 from 159.23.
Gold rose sharply to $4,584.74 an ounce, up from $4,479.57 on Thursday, lifting precious-metal miners. Endeavour Mining climbed 4.2%, adding 184.0p to 4,594.0p, while Fresnillo gained 1.4%, rising 17.00p to 3,257.00p — an increase of 0.52% on the day and 180% over the past 12 months.
Bank of England Governor Andrew Bailey, speaking in Reykjavik, Iceland, said allowing inflation to remain above the 2% target was “appropriate” given the uncertainty and weakness in the economy. He warned that reacting too early to inflation concerns “may generate undesirable volatility”. Bailey added: “Given the context of softness in the real economy and uncertainty around the scale and duration of the shock, tolerating temporarily above target inflation to provide some support for the real economy is an appropriate way to approach the trade-off.” He stressed that tolerance would weaken if signs of second-round effects emerged. The Monetary Policy Committee last month kept interest rates at 3.75%; inflation stood at 2.8% in April. Financial markets, which had previously expected rate cuts, now forecast a rise of 0.25 percentage points to 4% before December.
Ocado-Asda deal reshapes grocery e-commerce
The standout corporate story on Friday was Ocado’s announcement of an agreement to develop supermarket Asda’s online business across the UK using the Ocado Smart Platform. Ocado shares surged 7.1% on the day, having climbed around 14% in morning trading.
Leeds-based Asda, one of Britain’s largest grocers, reported total sales of more than £21 billion in 2025 and operates across 1,100 stores nationwide. Its online grocery business currently fulfills more than 700,000 ecommerce orders each week. Under the agreement, Ocado will provide its front-end webshop, in-store fulfilment software, and last-mile planning tools. Asda will also use the Ocado platform for orders placed through aggregator apps such as Uber Eats, Deliveroo, and Just Eat. The partnership aims to “quickly replace and upgrade” Asda’s existing e-commerce infrastructure, with a go-live target of early 2027.
Bank of America, citing comparable arrangements, estimates fees in the range of 0.7% to 1.0% of sales, implying annual revenue for Ocado of around £21 million to £30 million once the rollout is complete by financial 2028. The bank described the agreement as a “positive development” for Ocado and said the contract should be “highly profitable”.
RBC Capital Markets took a different view for Asda’s competitors, calling the deal a “small negative” for Tesco and J Sainsbury. “We expect this to be a significant upgrade to Asda’s ecommerce capabilities and should allow it to compete better in a fast growing part of the grocery market,” RBC analysts said. They noted that both Tesco and Sainsbury’s have strong ecommerce offers that are likely more profitable than Asda’s new arrangement, but added that “it is a further step forward in the turnaround for Asda.”
Shares in Tesco fell 2.2% on the day, while Sainsbury’s dropped 2.3%. Asda’s own financial performance has been under pressure: like-for-like sales fell 0.8% year-on-year in the first quarter to March 31, 2025, an improvement from a 4.2% decline in the previous quarter. Total sales in 2025 (excluding fuel) were £21.0 billion, a drop of 3.3% from 2024, and adjusted EBITDA after rent was £764 million, down 33.1%. Net debt stood at £3.1 billion, reduced by £500 million.
Retail sector under pressure as Deutsche Bank downgrades four stocks
The broader retail sector faced headwinds as Deutsche Bank Research downgraded ratings for Wickes, Dunelm, Currys, and B&M European Value Retail. Wickes shares fell 2.2%, Dunelm 2.3%, Currys 1.0%, and B&M European Value Retail 2.4% — the latter having already fallen 3.77% the previous day. Deutsche Bank analysts said that although the retail sector has derated since March as consensus expectations have come down on inflationary concerns, “we still see downside risks for lower income consumers and big ticket spend.”
Dell surges on Wall Street; top FTSE movers
In New York, Dell Technologies dominated headlines, with its stock storming 31% higher after first-quarter earnings beat expectations. The company reported record revenue of $43.8 billion for fiscal 2027’s first quarter, an 88% year-on-year increase, and adjusted earnings per share of $4.86, a 214% jump that beat the Street estimate by 64%. AI server revenue was a key driver, reaching $16.1 billion — nearly nine times higher than a year earlier — with a record AI backlog of $51.3 billion. Dell raised its full-year guidance to between $165 billion and $169 billion in revenue, up by $30 billion, and forecast EPS of $17.90 at the midpoint. “Dell is blowing the socks off expectations and raising its outlook materially,” analysts at JPMorgan said.
On the FTSE 100, the biggest risers alongside Endeavour Mining and Fresnillo were Autotrader, up 14.3p to 441.5p; Airtel Africa, up 8.2p to 352.6p; Convatec, up 3.9p to 202.2p; and DCC, up 115.0p to 6,005.0p. The biggest fallers were SSE, down 74.0p to 2,331.0p; Diageo, down 46.5p to 1,535.5p; Imperial Brands, down 73.0p to 2,696.0p; British American Tobacco, down 116.0p to 4,591.0p; and Coca-Cola Europacific Partners, down 170.0p to 6,670.0p.
Week ahead: manufacturing data and corporate results
Monday’s global economic calendar features a raft of manufacturing PMI reports, eurozone unemployment figures, and German retail sales data. In the UK corporate calendar next week, British American Tobacco — owner of Dunhill and Lucky Strike — will issue a trading update on Tuesday, alongside full-year results from water utility Pennon.
