FTSE 100 and 250 rise as Trump hints at Middle East peace

Major stock market indexes in the United Kingdom rebounded on Tuesday, ending a three-day streak of losses. The blue-chip FTSE 100 rose by 1.6% by 1015 GMT, while the mid-cap FTSE 250 gained 1.9%. These gains were triggered by recent statements from the United States President Donald Trump, who suggested that the conflict in the Middle East could be nearing a conclusion. If these levels hold, both indexes are on track for their most significant single-day advance in nearly a year. The shift in geopolitical sentiment caused a nearly 7% drop in the price of Brent Crude Oil. However, regional tensions remained evident as the Revolutionary Guards in Iran stated they would restrict oil shipments from the region if military pressure from the U.S. and Israel continues. This volatility weighed heavily on energy stocks, with the sector index falling 2.1%. Within this space, Shell plc saw a decline of 1.7%, while BP shares dropped 2.9%. The outlook for monetary policy remains uncertain as traders react to shifting economic data. While some had briefly anticipated a rate hike, market participants are now evenly divided on whether the Bank of England will implement a rate cut this year. Financial firms Standard Chartered PLC and Morgan Stanley have both pushed back their expectations for a rate reduction until the second quarter, citing inflation risks linked to the Middle East conflict. These concerns have left the FTSE 100 roughly 4.6% below its record high reached in late February, with the central bank expected to deliver its next interest rate decision on March 19. Domestic economic indicators also suggest a cautious environment. Consumer spending in Britain grew at a slow pace last month, according to data from Barclays PLC and the British Retail Consortium. The surveys indicated that households are becoming increasingly pessimistic about the economic outlook due to persistent inflation worries. In corporate news, Persimmon Plc shares jumped 6.3% after the home builder announced it expects to increase home deliveries in 2026, with annual profits likely reaching the top end of market forecasts. Meanwhile, Domino's Pizza Group plc rose 3% as the fast-food provider expressed confidence in its new fried chicken brand to support long-term growth.