British markets opened with cautious optimism on Tuesday, with the FTSE 100 advancing 0.47% as investors reacted to a reduction in geopolitical risk after U.S. President Donald Trump announced he had called off a planned strike on Iran. Germany’s DAX climbed 0.78% and France’s CAC 40 rose 0.37% in the same session. Sterling weakened 0.19% to 1.3396 against the dollar as of 03:16 ET (07:16 GMT).
The market uplift followed a late Monday update from President Trump on his social media platform, in which he said he had stood down the operation at the behest of Gulf Arab leaders. Trump named the Emir of Qatar, the Crown Prince of Saudi Arabia and the President of the UAE as having told him a diplomatic agreement appeared attainable, prompting him to delay a military response.
While the president instructed the Pentagon to remain prepared to execute "a full, large scale assault" if talks fail, traders read the decision as a near-term easing of tail risk, supporting equities at Tuesday’s open.
On the diplomatic side, Iran reported it had submitted an amended set of terms aimed solely at ending the war, while clarifying it had not "discussed any details regarding nuclear matters," which the Trump administration has identified as a non-negotiable issue. The White House deputy press secretary Anna Kelly reiterated that "nothing has changed," stressing that Iran must "renounce their nuclear ambitions for good" and reiterating that Tehran's enrichment capability had been "totally decimated" by last June’s Operation Midnight Hammer strikes.
Operational measures tied to the conflict continued. US Central Command said it had redirected 85 commercial vessels under an ongoing blockade of Iranian ports. Shipping flows through the strait showed some normalization after a recent low, with 55 commodity vessels transiting between May 11 and 17 compared with 19 the prior week.
Domestic data and corporate updates
Domestically, the labour market showed signs of softening. UK unemployment unexpectedly rose to 5% in March. Early April figures pointed to a monthly drop of about 100,000 in payrolled employees, suggesting labour-market weakness is becoming more pronounced amid rising costs and the headwinds posed by instability in the Middle East.
In company news, Currys reported an 18% increase in annual profit to roughly a3191 million, with like-for-like sales in the UK and Ireland up 3%. The electricals retailer said it had not yet seen an effect from the Middle East tensions.
Homebuilder Crest Nicholson postponed its half-year results until July 16 as it continues negotiations with lenders over a temporary easing of bank covenants. Food producer Cranswick delivered annual adjusted pretax profit that beat market expectations, backed by strong demand for poultry and pork products.
Travel caterer SSP Group said that recent like-for-like sales growth had been affected by weaker passenger flows in parts of Asia and Europe due to the Iran conflict, although it maintained that its full-year outlook remained on track.
In the banking sector, Standard Chartered announced it will eliminate more than 15% of roles within its corporate functions by 2030 as part of a restructuring intended to raise income per employee by about 20% by 2028. The bank also set a new return on tangible equity target of 15% for 2028 and approximately 18% by 2030.
Market implications
The immediate market response illustrates how sensitive risk assets remain to geopolitical developments. The de-escalation reduced a prominent near-term tail risk, lifting sentiment, but underlying economic signals from the UK and company-specific operational disruptions remain uneven. Shipping and passenger-traffic metrics are particularly relevant to supply chains and travel-related revenue streams, while retail and food-producer performance highlights pockets of resilience amid cost pressures.
Investors will likely continue to watch both diplomatic progress and domestic indicators, as shifts in either domain could quickly alter risk premia across sectors.