FTSE stocks up as Donald Trump ‘prioritises diplomatic efforts’ in Iran war

The FTSE 100 continued its strong start to the week on Tuesday amid reports that Donald Trump is prioritising diplomatic efforts over continued military escalation in Iran.

The index closed up 48.49 points, 0.5%, at 10,176.45, the FTSE 250 ended up 249.21 points, 1.2%, at 21,203.71, and the AIM All-Share advanced 7.00 points, 1.0%, at 717.12.

The Wall Street Journal cited US administration officials as saying the president and his aides had come to the conclusion that a mission to reopen the Strait of Hormuz waterway would extend the length of the conflict past his four to six-week timeline.

The WSJ added that Mr Trump had decided to focus on battering Iran’s missiles and navy, before looking to pressure Tehran diplomatically to reopen the strait, through which a fifth of the world’s oil is normally transported.

However, he has also threatened to strike the Islamic Republic’s energy infrastructure should it not make a deal.

Amid the uncertainty, the oil price eased from recent highs. Brent oil traded lower at 107.38 dollars a barrel on Tuesday afternoon, from 112.46 late on Monday.

David Morrison, senior market analyst at Trade Nation, said traders continue to be “buffeted by conflicting statements” from Mr Trump concerning the next steps in the US-Israeli war with Iran.

In European equities on Tuesday, the Cac 40 in Paris closed up 0.6%, while the Dax 40 in Frankfurt rose 0.5%.

Stocks in New York were also higher. The Dow Jones Industrial Average was up 1.1%, the S&P 500 index was 1.4% higher, and the Nasdaq Composite advanced 1.9%.

The yield on the US 10-year Treasury trimmed to 4.33% on Tuesday from 4.34% on Monday. The US 30-year Treasury stretched to 4.91% from 4.90%.

The pound rose to 1.3205 dollars on Tuesday afternoon from 1.3191 at the equities close on Monday. Against the euro, sterling fell to 1.1463 euros from 1.1518.

The euro stood higher against the greenback at 1.1523 dollars from 1.1452. Against the yen, the dollar was trading lower at 159.02 compared with 159.53.

Eurozone inflation leapt in March because of surging energy prices caused by the Iran war, official data showed on Tuesday, hitting its highest level since January 2025.

Consumer prices rose by 2.5% in March, sharply up from 1.9% in February, the EU’s statistics agency said, albeit below FXStreet consensus which forecast 2.7%.

But annual core inflation – which strips out volatile components such as energy and food – eased slightly to 2.3% in March from 2.4%, while food inflation also declined.

The European Commission urged EU member states to make “timely and co-ordinated preparations” to secure oil supplies.

Analysts at Citi said energy price rises had been partly “tamed” by indirect tax cuts on final prices in some jurisdictions such as Italy and Spain, although the largest countries in the bloc are still holding off.

“We expect more governments to intervene with fiscal measures to cushion the energy hit,” Citi added.

In London, Unilever shares fell 7.3% as it confirmed it has agreed to combine its Foods business with McCormick & Co, creating a 20 billion dollar revenue “global flavour powerhouse” and accelerating its shift to a pureplay home and personal care group.

The deal will see Unilever separate its Foods division and merge it with McCormick in a transaction valuing the business at USD44.8 billion.

Under the terms, Unilever and its shareholders will receive shares equivalent to 65% of the combined company, alongside USD15.7 billion in cash.

Following completion, Unilever will become a “pureplay” home and personal care company, with pro-forma annual revenue of around 39 billion euros, focusing on beauty, wellbeing, personal care and home care.

Analysts at RBC Capital Markets said they were “unimpressed”.

“What we really can’t get our heads round is why is Unilever disposing of a business dominated by two brands, of which it owned 100%, for a minimal control premium and leaving its shareholders with a 55% shareholding in a sprawling food business,” the broker said.

Miners supported the FTSE 100 as the price of gold, silver and copper rose.

Gold traded at 4,613.15 dollars an ounce on Tuesday, up from 4,541.34 at the same time on Monday.

Antofagasta, Fresnillo, Endeavour Mining and Anglo American were prominent gainers, up 5.3%, 4.1%, 4.2% and 2.8% respectively.

Sports retailer JD Sports rallied 3.8% ahead of key trading partner Nike’s financial third quarter results after the New York market close.

On the FTSE 250, Raspberry Pi stole the show, storming 47% to the good, after well-received full-year results.

The Cambridge-based manufacturer of low-cost computers said full-year 2026 profitability is anticipated to be in line with market estimates, with revenue materially higher.

The firm, which listed in 2024, said increased memory costs are being “successfully navigated”.

In 2025, adjusted earnings before interest, tax, depreciation and amortisation improved 25% to 46.4 million dollars from 37.2 million, compared with guidance of “not less than” 45 million provided in January.

Also in favour, Ashmore rose 6.7% after the asset manager announced a strategic partnership with Japan Post Insurance which could see the Japanese life insurer take an up to 2.9% stake in the London-based firm.

Japan Post Insurance initially intends to invest a billion dollars into a range of Ashmore-managed emerging market funds, in addition to JPI’s assets under management by Ashmore.

Other risers on the FTSE 250 included Irn Bru maker AG Barr, up 5.7%, and food packaging company Hilton Food, up 4.0%, after well received results.

Future plunged 24% as the owner of Go.Compare said continued shifts in the audience derived from Google search are having a more pronounced impact than anticipated, negatively impacting higher-margin programmatic advertising and e-commerce revenue.

The biggest risers on the FTSE 100 were Antofagasta, up 166.0p at 3,327.0p, Endeavour Mining, up 182.0p at 4,460.0p, Fresnillo, up 130.0p at 3,304.0p, Metlen Energy & Metals, up 1.3p at 33.4p and JD Sports Fashion, up 2.5p at 70.6p.

The biggest fallers were Unilever, down 329.5p at 4,199.0p, IMI, down 62.0p at 2,530.0p, Croda, down 53.0p at 2,815.0p, Diageo, down 23.0p at 1,396.0p and Coca-Cola Europacific Partners, down 110.0p at 6,870.0p.