Global stocks slide and the pound falls as White House asks Pentagon to draw up Iran strike options

From the Newshound archive · first published 8 October 2026.

Markets worldwide sold off sharply on Thursday after reports that the White House has asked the Pentagon to examine strike options against Iranian targets, with strikes reportedly possible ahead of the November 3 US midterm elections. Brent crude surged from $101.77 to above $105 a barrel, hammering equities and pushing bond yields higher. The Pentagon reportedly directed Central Command to complete readiness planning for renewed combat operations in Iran. The pound fell to $1.3118 against the dollar as analysts warned geopolitics, inflation and earnings risks are all colliding at once.

The FTSE 100 closed down 0.2% at 10,441.60, outperforming a DAX that slid 1.2% and a CAC 40 off 0.5%; US indices also fell.

Yemen's Houthis launched missile strikes on Riyadh airport on Thursday and warned oil facility workers in Saudi Arabia to evacuate, deepening the regional crisis.

Tesco was the lone bright spot, surging 5.2% after well-received interim results, even as analysts warned a 25-30% energy price rise in January risks another cost-of-living crunch.