FTSE 100 Live: Gilt yields surge over Starmer fears; HSBC drops on private credit alarm

May 5, 2026 - 09:04

Oil tankers sit at anchor offshore in the Strait of Hormuz. (Image: PA)

Good morning and welcome back to the City AM liveblog.

The London market is returning from the long weekend to little change amidst the conflict in the Middle East.

A day of tensions on Monday have kept question marks hanging over the Strait of Hormuz as nations scramble to combat fuel shortages.

Donald Trump said the US struck seven Iranian “small boats” as they work to open the narrow waterway.

In a post on Truth Social, the President said Iran has “taken some shots at unrelated nations”, including a South Korean vessel.

It comes as Washington strums up a plan dubbed Operation Freedom by Trump that intends to escort stranded vessels through the narrow channel.

Meanwhile, Islamic Revolutionary Guard Corps (IRGC), according to Iranian state media, has warned that any vessels passing through the “closed” waterway will be “struck and destroyed”.

HSBC was the FTSE 100’s biggest faller on Tuesday’s open, as the banking giant took a $400m fraud-related credit charge and missed its profit target.

The bank has priced in a $300m hit from the Middle East conflict and saw profit fall by $1.3bn (£961m).

US tech firm Palantir rocketed past analyst forecasts to post $1.6bn (£1.2bn) in revenue, as the AI-powered firm ramps up its deals with governments, including here in the UK.

The tech firm’s partnerships with the NHS and the Ministry of Defence have seen it be dragged into political spates – including with Greens leader Zack Polanski – and these debates are sure to continue as Palantir rakes in new deals.

Tuesday’s first major political story came as it was reported that Chancellor Rachel Reeves exchanged some choice words with Scott Bessent, her US counterpart, over the war in Iran.

We’ll be bringing you the latest as it unfolds.