FTSE 100 Plunges as Trump Gives Iran Ultimatum

London stocks drop into correction territory as US President threatens strikes on Iran's power grid

Mar. 23, 2026 at 9:54am

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The FTSE 100 and European stocks plunged on Monday morning after US President Donald Trump threatened to hit Iran's electricity grid unless it allows oil tankers to travel safely along its coastline. Trump has given Tehran until the end of the day to reopen the Strait of Hormuz or risk strikes on the country's power generation facilities, raising fears of further escalation in the Middle East conflict.

Why it matters

The ultimatum from Trump comes amid Tehran's threat to 'irreversibly destroy' essential infrastructure across the Middle East in response, meaning the war is entering a new phase of escalation. Each day the conflict continues does more damage to the global economy and drives inflation higher, with recession chances rising.

The details

The FTSE 100 has now dropped by more than 11% from its record high set on 27 February, just before the war in Iran began, and on Friday it dropped below 10,000 points, meaning it has lost all its gains for 2026. A fall of 10% or more is classed as a correction. Germany's DAX dipped 1.8% and the CAC in Paris headed 1.4% into the red. The pan-European STOXX 600 was 1.6% lower.

  • On 27 February, the FTSE 100 reached a record high.
  • On 23 March 2026, the FTSE 100 dropped below 10,000 points.

The players

Donald Trump

The President of the United States who has issued an ultimatum to Iran.

Tehran

The capital of Iran, which has threatened to 'irreversibly destroy' essential infrastructure across the Middle East in response to Trump's ultimatum.

Chris Beauchamp

The chief analyst at IG who commented on investors' reactions to the escalating conflict in the Middle East.

Sir Keir Starmer

The Prime Minister of the United Kingdom who is set to hold a Cobra meeting to address the economic impact of the Iran war.

Chris O'Shea

The chief executive of Centrica, which owns British Gas, who said global oil supplies are already down 20% because of the Iran war.

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What they’re saying

“Investors who have spent the weekend watching fresh strikes in the Middle East are now waiting to see what will happen when Trump's 48 hour deadline expires tonight. But they are in no mood to hang around, and have continued to sell stocks and precious metals.”

— Chris Beauchamp, Chief Analyst

“Global oil supplies are already down 20% because of the Iran war.”

— Chris O'Shea, Chief Executive

What’s next

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The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.