US-Iran peace hope boosts stocks but Nvidia toils

Stocks in London closed higher on Monday as the oil price fell and US tech stocks rallied, although Nvidia fell as a scandal enveloped its chief executive Jensen Huang.

The FTSE 100 index closed up 108.93 points, 1.0%, at 10,782.87. The FTSE 250 ended 202.02 points higher, 0.8%, at 24,706.34, and the AIM all-share added 7.66 points, 1.0%, at 761.39.

In Europe, the CAC 40 in Paris rose 1.2%, while the DAX 40 in Frankfurt climbed 1.7%.

In the US, equity markets were higher. At about the time of the London equities close on Monday, the Dow Jones Industrial Average was up 1.8%, the S&P 500 was 2.0% higher and the Nasdaq Composite climbed 2.4%.

The gains came despite a 5.7% fall for chip maker Nvidia as investors weighed the potential fallout from an investigation into Mr Huang’s relationship with a woman suspected by US intelligence officials of spying for China.

The executive, Alice Huang, also known as Huang Le, has links to Megaspeed International, a Singapore-based customer of Nvidia that has faced allegations of attempting to divert advanced US chips to China.

On Sunday, Mr Huang admitted the affair and apologised to his family and colleagues.

Nvidia said its board had opened an independent investigation but said “the board has no reason to believe that either national security or Nvidia secrets were compromised”.

Technology analyst Dan Ives said it “is a black eye moment for Jensen and will spark multiple congressional inquiries at a minimum and will create an overhang”.

China on Monday said the claims that it had spied on Mr Huang were “baseless”.

The issue was initially flagged by short seller Culper Research in May, and subsequently picked up by the New York Times and others.

In its report, Culper Research challenged Nvidia’s public assertions that its direct compute exposure to China had dropped to zero following US trade restrictions implemented in April 2025 and said that Mr Huang was maintaining an “uncomfortably close relationship” with Megaspeed’s Ms Huang.

Away from Nvidia, the mood was much brighter after last week’s volatility which followed the “blue wave” electoral success for the Democrats.

Morgan Stanley called the sell-off “unwarranted” and “overdone”.

The US investment bank said in a research note: “Over the past week, the market has undergone an earthquake event, with significant uncertainty around the impact of the midterms on the data centre build-out, the trajectory of the cycle, and implications for global stocks.

“We see the market moves as an overreaction and think the ultimate impact will be a push-out of some projects from 2028 to 2029, rather than a derailing of the capex story.”

US inflation figures on Tuesday will be the next market test, after last week’s blow-out nonfarm payrolls figures.

Goldman Sachs expects a 0.2% increase in October core consumer prices on-month, in line with consensus. It also sees headline consumer price growth of 0.2% on-month, below 0.3% consensus.

The pound was quoted at 1.3415 dollars late Monday afternoon, up from 1.3362 dollars at the same time on Friday. Against the euro, sterling ebbed to 1.1974 euro from 1.1989 euro.

The euro was higher at 1.1203 dollars from 1.1149 dollars late Friday. Against the yen, the dollar was lower at 158.05 yen from 158.34 yen.

The yield on the US 10-year Treasury was quoted at 4.88% late on Monday afternoon, stretched from 4.87% on Friday. The yield on the US 30-year Treasury was at 5.27%, widened from 5.26%.

Supporting equity markets on Monday, there was a further fall in the oil price, on hopes for diplomatic talks aimed at ending the US-Iran war.

US President Donald Trump on Sunday cast doubt on renewed fighting with Iran, telling CNN that it was “highly unlikely” so long as talks progressed.

In the CNN interview, Mr Trump once again suggested that the economic pressure Iran is under would force its leaders into accepting a peace deal on the US’ terms.

“They’re a failing nation. It just came out, you saw this year, 301% inflation,” Mr Trump claimed. “They’re withering away financially. We’ve hit them militarily. We could finish them off.”

But Iranian foreign minister Abbas Araghchi suggested peace talks had been paused while the political fallout of the Democratic Party’s landslide victory was being assessed.

Brent oil was trading at 94.27 dollars a barrel on Monday, lower than 97.66 dollars late Friday. Gold was quoted at 4,116.80 dollars an ounce on Monday, higher than 4,058.03 dollars on Friday.

On London’s FTSE 100, the oil price fall saw BP and Shell dip 0.5% and 0.6% respectively, while a lofty copper price put a spring in the step of miners, with Antofagasta and Anglo American up 6.2% and 5.2% respectively.

Airlines and aerospace firms benefited from the lower oil price and hopes of peace between the US and Iran, with British Airways owner IAG up 3.5%, Rolls-Royce up 4.8% and Melrose Industries up 3.3%.

On the FTSE 250, budget airline Wizz Air gained 6.1% while the US tech rally supported low-cost, palm-sized computer maker Raspberry Pi, up 4.6%.

But Kainos shares plunged 12%.

London-based Kainos provides IT support to customers across three divisions: Digital Services, Workday Services, and Workday Products.

Delivering half-year results, it confirmed full-year financial guidance, as revenue and profit beat expectations in the first half of the year, despite crimped margins.

Gross margin declined to 43.1% from 48.0% mainly reflecting the increased use of contractors and partners to help scale up major new projects, Kainos said.

Contractors and partners have much lower margins than Kainos staff, the firm explained. Kainos increasingly uses partners to win larger contracts where it acts as prime contractor, it explained.

“This strategy leads to lower gross margins but much higher total contract value wins as evidenced in the booking figures,” it said.

AJ Bell investment director Russ Mould said investors were “unimpressed” by the evidence of margin pressure and an “underwhelming” full-year outlook.

The biggest risers on the FTSE 100 were Antofagasta, up 192.0p at 3,305.0p, Anglo American, up 193.0p at 3,894.0p, Fresnillo, up 125.0p at 2,638.0p, Babcock International, up 48.0p at 1,054.5p and Rolls-Royce, up 59.4p at 1,320.6p.

The biggest fallers on the FTSE 100 were Imperial Brands, down 74.0p at 2,899.0p, Haleon, down 8.1p at 330.8p, Whitbread, down 64.0p at 2,763.0p, British American Tobacco, down 90.0p at 4,477.0p and Smith & Nephew, down 20.5p at 1,140.5p.

Tuesday’s global economic events calendar has trade data in China overnight, with US inflation figures following later in the day.

Tuesday’s local corporate calendar has half-year results from telecommunications provider Vodafone and a trading statement from Watches of Switzerland.

Contributed by Alliance News.