The FTSE 100 surged on Tuesday after Donald Trump hinted that the war in the Middle East could end sooner than many had first feared by saying the war was ‘very complete, pretty much’.
The US President’s comments to the US press sent oil prices into freefall yesterday evening and, remarkably, oil traded at a negative price for a period. Brent oil had traded as much as 22% higher in Monday’s Asian session.
Oil prices are notoriously volatile, but you will rarely see a day like we did yesterday. Brent oil prices surged nearly $25 to trade above $116 before sinking more than $30, peak-to-trough, as investors rolled back bets on a prolonged conflict that deepens the oil shock.
Brent was trading at $90 at the time of writing on Tuesday.
The net result for the FTSE 100 was a 1.8% gain at the time of writing, as investors piled back into beaten-down sectors such as miners, housebuilders, and banks. Stagflation still remains a risk, but the mood has improved dramatically over the past 24 hours.
“The market is in highly speculative mode thanks to the absence of any certainty about what the next few days, let alone weeks will look like,” said AJ Bell investment director Russ Mould.
“In these circumstances, Donald Trump’s comments about the Iran war ending soon have been seized upon like water offered to someone who’s just consumed a full bag of salty crisps.
Familiar higher-beta stocks such as Antofagasta, Rolls-Royce, Barclays, and Fresnillo were among the risers.
Persimmon was the FTSE 100’s top riser after the housebuilder surprised traders with a notably upbeat set of full-year results that squashed concerns about their ability to grow revenues against a backdrop of general economic weakness.
Mark Crouch, market analyst for eToro, explained: “Shares in Persimmon got a welcome lift after the housebuilder delivered a solid set of full-year numbers, with higher home completions feeding through to stronger profits and revenue.”
“The group built 11,905 homes in 2025, a 12 per cent increase on the previous year, helping revenue climb 17 per cent to £3.75bn and underlying profit before tax rise to £445.6m.”
Persimmon shares were 9% higher at the time of writing.
The inevitable losers from the volatility in oil prices were Shell and BP, which both fell by more than 2%.
It’s been interesting to see a relatively muted response to rising oil prices from the two oil majors whose shares are higher since the US and Israel launched attacks on Iran, but only slightly.
Such price action would suggest that equity traders aren’t prepared to take a position on oil staying at current elevated levels for long.
“All eyes are likely to be on the G7 and whether it will release emergency stockpiles of oil to help calm the markets further,” Russ Mould said.