Hedge funds are increasing shorts on European stocks amid heightened geopolitical tensions and energy risks. Positions concentrate on low-cost airlines and other rate-sensitive shares. The UK, with deep liquidity and exposure to utilities and housing, is seen as an easier trade.

A Gulf state vowed severe reprisals as a deadline from a rival power to reopen the Strait of Hormuz nears. Both sides dismissed proposed de-escalation. The standoff threatens shipping and global oil supplies, raising the risk of higher prices and market volatility.

Trump warned Tehran to reopen the Strait of Hormuz or face US military action against infrastructure, including power plants and bridges, following the rescue of a US F‑15 airman. Washington said the aim is to protect shipping and energy supplies, while urging partners to press for de‑escalation.

A US fighter jet was downed over Iran, sparking a search for its two-person crew; one has been rescued. Iranian state-linked reports said local forces brought it down. The US president condemned the incident and urged raising defence spending to $1.5tn.