Global financial markets rebounded during Tuesday trading amid hopes that some US trading partners will be able to strike trade deals to avoid the full force of US President Donald Trump’s tariff plans.
Comments from US treasury secretary Scott Bessent that he believes they could strike “some good deals” helped to ease recent market concerns.
Nevertheless, major markets are still heavily down after a dramatic slump when Mr Trump announced plans to hit countries with tariffs last Wednesday.
Key indexes, such as London’s FTSE 100, slumped heavily on Monday after the president said he would launch deeper tariffs against China if they push forward with their own retaliatory tariffs.
London’s top index made strong gains on the back of positive trading for defence and banking stocks.
The FTSE 100 finished up by 2.71%, or 208.45 points, to close at 7,910.53.
Elsewhere in Europe, there was also positive momentum, driven by strong overnight trading China.
The Cac 40 ended 2.5% higher for the day and the Dax index was up 2.36%.
On Wall Street, the S&P and Dow Jones both climbed more than 3% at the start of trading as traders became more bullish.
Axel Rudolph, senior technical analyst at IG, said: “Following three days of intense selling, global stock indices bounced back as investors took advantage of lower valuations and grew more optimistic about US tariff negotiations.
“Nonetheless, tensions between the US and China remain elevated after Beijing vowed to ‘fight to the end’ in response to Mr Trump’s threat of imposing new 50% tariffs unless China rapidly removed its retaliatory measures.”
Meanwhile, sterling staged a slight recovery despite economists suggesting more interest rate cuts could now be on the cards.
The pound was up 0.3% at 1.276 US dollars and was up 0.45% at 1.170 euros when London’s markets closed.
In company news, pawnbroker Ramsdens saw its shares bounce to its highest level for a month after it raised its outlook for the year following a boost to precious metal profits driven by higher gold prices.
Ramsdens, which has 169 stores in the UK, said jewellery profits also jumped 15% over the first half.
Shares in the company lifted by 14.6% to 235p as a result.
Elsewhere, Hilton Food Group were a touch higher at the close of trading after sales jumped last year on the back of surging UK volumes.
The food supplier was 0.7% higher at 857p after it said trading started well in 2025 despite an uncertain market for its retail customers.
BT Group was one of the day’s notable fallers, dropping by 3.1% to 151.3p, after analysts at UBS warned that the telecoms giant could suffer from Sky’s deal to move broadband customers to rival CityFibre.
The price of oil lost some of its gains from overnight after a choppy session on Tuesday.
A barrel of Brent crude oil was down by 0.34% to 63.99 dollars (£50.11) as markets were closing in London.
The biggest risers on the FTSE 100 were Rolls-Royce, up 43.4p to 679.2p, Experian, up 187p to 3,278p, Hiscox, up 63p to 1,110p, IAG, up 13.3p to 237.7p, and Games Workshop, up 710p to 13,120p.
The biggest fallers on the FTSE 100 were BT, down 4.9p to 151.3p, Standard Chartered, down 14.4p to 922.8p, Kingfisher, down 2.8p to 245.6p, JD Sports, down 0.32p to 63.16p, and Rio Tinto, down 18p to 4,215.5p.
