The FTSE 100 surged on Tuesday for a second straight session as London was propelled higher by a US tech rebound and hopes of an interest rate cut in December.

Disappointing UK jobs data has almost made an interest rate cut in December a near certainty after budget fears sent the UK unemployment rate to 5%.

The FTSE 100’s inverse relationship with the pound kicked in, and London’s leading index surged 0.9% to a fresh record high. 

“The FTSE 100 made new record highs on Tuesday, taking its cue from a strong rebound on Wall Street and the added tailwind of sterling weakness,” said AJ Bell investment director Russ Mould.

UK markets also benefited from an encouraging session for US stocks last night. AI jitters last week are turning out to be a blip. We’ll need a couple more positive sessions for this to be confirmed, but surging recoveries for Nvidia and Palantir overnight demonstrated that demand for the world’s leading AI stock is alive and well. 

Vodafone was among London’s top performers after saying it would hike its dividend amid positivity in the German market. 

“Vodafone put on a confident face this morning, unveiling a new progressive dividend policy and guiding to the top end of FY26 expectations – the first signal that its self-declared growth phase is gaining traction,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“With pressure mounting ahead of the print, the return to service revenue growth in Germany marks a meaningful step in turning around its largest market.”

Housebuilders inevitably enjoyed increased chances interest rate cut, with Berkeley Group rising 2%.

“The chances of a December rate cut have risen throughout the morning following the unemployment figures, and now stands at 86%,” explained Chris Beauchamp, Chief Market Analyst at IG.

“This expectation of looser policy has given a boost to housebuilder shares – Berkeley, Barratt Redrow and Persimmon are all higher this morning, notably head of figures from the latter two this week.”

Although the FTSE 100 posted strong gains on Tuesday, it still has its fair share of losers. 

Croda was the top faller, down 3%, while supermarkets felt the pressure of a deteriorating UK jobs market. Tesco, Sainsbury’s and Marks & Spencer were all lower by 2% at the time of writing. 

4imprint says it’s on track to exceed analyst expectations for both revenue and profit despite challenging macro conditions.

The promotional products giant expects full-year revenue of at least $1.32 billion, hitting the high end of current analyst forecasts. Even more impressive, profit before tax is projected to reach at least $142 million, surpassing the upper end of analyst predictions.

Revenue declined 2% in the first 10 months compared to 2024, as order intake remained steady at just 3% below prior year levels, while average order values held firm.

Existing customer orders remained flat year-to-date, reflecting strong retention rates that demonstrate customer loyalty. However, new customer acquisition faced headwinds, with new customer orders down 13% – a trend that began in the first half of the year.

Gross profit margins remained just below 33% with product cost increases from tariffs are being implemented more gradually than initially expected, while the marketing mix provides valuable flexibility.

This margin strength enabled 4imprint to maintain double-digit operating profit margins throughout the 10-month period.

The FTSE 100 jumped on Monday as investors cheered a breakthrough in Washington that could end the government shutdown, which is starting to have a real economic impact on the US.

London’s leading index was trading 0.9% higher at the time of writing.

“Glimmers of hope that an end might be in sight to the longest running US government shutdown in history put markets in a positive mood,” said AJ Bell investment director Russ Mould.

“A vote in the Senate is an important first step but any agreement still needs to clear a vote in the House of Representatives along with several other hurdles. A key impact on the markets of the impasse, beyond the hit to the wider economy, has been the lack of data as key releases on areas like the jobs market have been delayed.”

The news will be welcomed by stock traders who were hit by several sharp selloffs last week amid concerns about AI valuations.

S&P 500 futures were trading 0.8% higher at the time of writing.

Today’s FTSE 100 rally takes the index back within touching distance of all-time highs, as its defensive attributes helped it avoid the worst of the volatility last week.

Diageo was the FTSE 100’s top riser, storming 7% higher, on the news that former Tesco CEO Sir Dave Lewis would take up the role of CEO at the drinks giant.

“Diageo has named Sir Dave Lewis as its next CEO, effective January 2026, opting for an external hire over interim chief Nik Jhangiani,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.

“Lewis brings deep experience in consumer brands from his time leading Tesco and decades at Unilever, though he lacks direct exposure to the spirits industry. Investors may welcome his strong marketing pedigree, but any major strategic reset will take time, leaving near-term focus on navigating tough trading conditions.”

Gold’s rally saw Fresnillo 5% higher on Monday as the precious metals miner attempted to re-establish its meteoric rally.

“Gold surged on Monday, reaching its highest level in three weeks as renewed expectations of a Federal Reserve rate cut and persistent geopolitical tensions lifted safe-haven demand,” said Van Ha Trinh, Financial Markets Strategist at Exness.

Polar Capital Technology Trust shares were in demand as investors positioned for a rebound in US tech stocks after last week’s declines. The trust was 4% higher.

UK intellectual property investment group Tekcapital has announced a strategic alliance with artificial intelligence innovator Nexscient, Inc.

The partnership aims to identify and acquire transformative university technologies that align with Nexscient’s AI and advanced computing focus.

The collaboration leverages Tekcapital’s extensive network of universities and research institutions to create opportunities for both companies. Nexscient will evaluate and pursue acquisitions or licenses of these innovations through strategic transactions designed to generate long-term shareholder value.

Under the agreement, Tekcapital will provide Nexscient with continuous access to a carefully curated pipeline of university-originated technologies. This includes identifying suitable acquisition candidates and leading early-stage negotiations with research institutions.

Tekcapital will also structure initial transactions for technologies that Nexscient may acquire using company stock as consideration. This approach allows for flexible deal-making while preserving cash resources for both parties.

Tekcapital built its five portfolio companies almost exclusively from technologies developed by research organizations, and its experience in the area continues to yield commercial opportunities for the business.

“This alliance with Tekcapital represents a powerful extension of Nexscient’s vision to identify, fund, and commercialize high-impact AI technologies,” said Fred E. Tannous, Chief Executive Officer of Nexscient, Inc.

“Tekcapital’s unparalleled access to global university innovation, combined with our ability to integrate and scale those technologies into commercial AI solutions, creates a dynamic pathway from academic discovery to market transformation.  We believe that this collaboration accelerates our mission to deliver the next dimension of AI.”