The FTSE 100 surged higher on Tuesday after Donald Trump’s latest retreat in his scatter gun approach to trade policy.
In another seemingly manufactured dip buying opportunity, equities bounced back from a short, sharp selloff caused by the latest assault on global trade by Donald Trump.
Last week, a social media post outlining a 50% tariff on EU imports stopped the global equity market rally in its tracks, sending US and European equities into a one-day tailspin.
However, over the weekend, Trump eased market tensions by delaying the 50% tariffs from 1st June to 9th July. The delaying of tariffs is becoming a familiar playbook for the President, and global equity markets are becoming wise to the V-shape recoveries that have followed initial sell-offs.
Major equity indices recovered most of their losses after Donald Trump pulled back from the implementation of Liberation Day tariffs, and the latest attack on the EU has proved to be a smaller-scale repeat of the price action seen since the beginning of April.
Today’s rally has pushed the FTSE 100 within reach of its all-time highs at 8,871, with the index needing less than a 1% gain to trade at never-before-seen levels.
“A mood of cautious relief is spreading after the long weekend, amid hopes for more fruitful trade negotiations between the United States and its global partners,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“There are no post bank holiday blues for the London market, with the Footsie in striking distance of the record high reached in February. More positive vibes are pulsing about the outlook for the global economy, with hopes that more scores can be etched on the doors of trade talks.”
There were few losers on Tuesday, with 91 of the FTSE 100’s constituents trading higher at the time of writing.
Rolls Royce and BAE Systems were among the top risers after Donald Trump and Moscow traded verbal criticism over the weekend that hit hopes of a ceasefire in Ukraine in the short term.
Intermediate Capital Group was the FTSE 100 top riser, gaining 3.9%, as it bounced back from selling after the release of its final results last week. JD Sport was another recovery story that rose more than 2%.
The risk on feel to Tuesday’s FTSE 100 rally left safe-haven stocks out of favour. Precious metals miners Fresnillo and Endeavour Mining lost their shine and fell by over 2%. The pair are still among the best-performing FTSE 100 stocks of 2025.