UK and European equities traded with a cautious, risk-off tone as investors weighed rising geopolitical risk alongside a fresh round of corporate updates. Energy names found support from firmer crude, but broader index leadership was uneven, with defensives and rate-sensitive sectors showing mixed performance as investors assessed what higher energy costs could mean for inflation expectations and central-bank policy.

US equities ended lower as a renewed rise in oil prices and heightened Middle East tensions pressured sentiment, while mixed company results kept investors selective. The overall tone leaned defensive, with cyclical appetite muted as markets balanced the near-term boost to energy cash flows against the wider risk of tighter financial conditions if energy-driven inflation proves persistent.

Asia-Pacific markets were mixed but generally steadier, with several benchmarks recovering after recent holiday closures and improved risk appetite in parts of North Asia. Even so, the region remained sensitive to global macro signals—particularly the implications of higher energy prices for importers and the potential for a stronger inflation impulse to feed back into global rates and currency volatility.

Oil prices advanced, driven primarily by geopolitical risk premia linked to concerns about possible escalation involving the United States and Iran and the vulnerability of key shipping routes. The move reinforced near-term support for energy equities, but it also added a layer of uncertainty for the broader market by reviving inflation sensitivity across rates and risk assets.

Gold held near elevated levels as safe-haven demand remained firm amid the same geopolitical backdrop lifting crude. Price action suggested a balance between defensive positioning and intermittent profit-taking, with investors continuing to view bullion as portfolio insurance against shocks to growth and inflation expectations.

InterContinental Hotels Group struck a more constructive tone on outlook, leaning on expected demand uplift from major international events and continued brand and portfolio expansion. While investors continue to debate the resilience of US travel demand, the group’s messaging emphasised scale benefits and capital returns, reinforcing the view that high quality global operators may be better positioned to navigate uneven regional travel trends.