- FTSE 100 up 219 points to 10,438
- Trump pauses 'Project Freedom' in Strait to focus on Iran talks
- US officials believe deal with Iran is close
- UK services PMI improves, but costs spike
- Diageo, Next, Wetherspoon, Smith & Nephew and Reach report updates
5.30pm: Winning day
Stocks were boosted by optimism the US and Iran were nearing a peace deal on Wednesday, which saw the FTSE 100 finish up 219 points at 10,438.
Across the Atlantic, the Nasdaq was up 1.6%, the S&P 500 added 1.1% and he Dow Jones was up 1%.
4.15pm: Big recovery for FTSE, but is it built on Trumpian sand?
We're heading for what should be one of the best days for the FTSE 100 in a while.
Precious metals miners Fresnillo and Endeavour, airline engineers Melrose and Rolls, base metals miners Anto and Anglo, British Airways owner IAG, Diago and lenders Barclays and NatWest are the biggest risers, between 6% and 11%.
Markets are "reaching euphoria state on flimsy news", says Chris Beauchamp at IG.
"Traders quickly skimming headlines caused equities to make further strong gains, though a closer reading suggests that even an initial understanding will, initially, lead only to more talks.
"Still, any hint of fresh talks is enough to spark another manic round of buying, a sign of how keen investors are to see the end of this ill-conceived conflict."
Oil prices are back above $102 a barrel, having swung from almost $115 two days ago, to below $100 earlier today.
3.18pm: Notable notes
A flick through some of the day's analyst stock and sector musings.
JPMorgan highlights Standard Chartered ahead of a closely watched investor day on 19 May, with the US bank raising its price target as it expects some ambitious new profitability targets to 2028.
Analyst Kian Abouhossein forecasts a dividend payout ratio of 35%, ahead of the circa-30% implied by the City consensus, with total distributions including buybacks of $13 billion between 2026 and 2028.
Elsewhere, Citi believes BP could be entering a decisive summer dealmaking, as the oil company’s new chief executive moves to reshape the group and further reduce leverage.
Potential asset sales could bolster the cash pile by around US$15 billion, giving the board fresh momentum before a likely investor day of its own in the autumn.
Colleagues at Citi see Vodafone's deal to take full control of its UK joint venture as broadly positive, with the price below the £16.5 billion level implied in earlier put and call options. There is a likely trade-off, as the announcement suggests that Vodafone will pause its buyback.
In the world of investment trusts, analysts at Canaccord Genuity have initiated on two JPMorgan emerging market investment trusts with similar names but markedly different strategies: JPMorgan Emerging Markets Growth & Income (ticker: JMGI) and JPMorgan Emerging Markets Dividend Income (JEMI).
Analyst Iain Scouller's current preference is for the growth focus provided by JMGI, leading to an initiation with a 'buy' rating, while JEMI gets a 'hold'.
And UK bank shares have been flagged by Jefferies as looking undervalued despite a steady stream of earnings upgrades, with investors increasingly focused on political and geopolitical risks.
However, despite supportive fundamentals, the sector has de-rated sharply this year, with share prices down around 10% due to investor concern over what they describe as “Scenario D” – a combination of geopolitical uncertainty linked to the Iran conflict and the risk of political change in the UK.
2.51pm: US stocks open at new record highs
US stocks have surged to new highs at the open.
Both the Nasdaq and Dow Jones have both risen almost 1%, while the S&P 500 has climbed 53 points or 0.7% to a new record high above 7,310.
Top of the leaderboard is Advanced Micro Devices, up 19.3%, with Super Micro Computer up 17.5%.
Leading the Dow is Disney, up 8% on the back of its earnings that exceeded Street estimates thanks to growth in streaming and theme park revenues.
2.25pm: Iran parliament pours scorn on US 'wishlist'
Oil prices have rebounded a little in the past half hour.
Partly this may be due to some response from Iran to the report from Axios about the US 'one-pager' to end the war.
It is the "Americans' wish list", says Ebrahim Rezaei, the Iranian parliament’s spokesperson for national security and foreign policy.
"Americans will not obtain through a failed war what they failed to gain in face-to-face negotiations," he added in a post on X, translated by the social media platform.
"Iran has its finger on the trigger and is ready; if they do not surrender and grant the necessary concessions, or if they or their devilish henchdog allies try to act mischievously, we will deliver a harsh and regret-inducing response."
Here's the post:
متن اکسیوس لیست آرزوهای آمریکاییهاست تا یک واقعیت،
آمریکاییها چیزی که در مذاکرات رودررو بدست نیاوردهاند در یک جنگ شکست خورده به دست نخواهند آورد،
ایران دست به ماشه و آماده است، اگر تسلیم نشوند و امتیازات لازم را ندهند یا بخواهند خودشان یا سگهای پادوشان شیطنتی کنند پاسخ سخت و…
— ابراهیم رضایی (@EbrahimRezaei14) May 6, 2026
Meanwhile, President Trump has also taken to social media to says if Iran agrees to the one-pager, "the highly effective blockade will allow the Hormuz Strait to be open to all, including Iran.
"If they don’t agree, the bombing starts, and it will be, sadly, at a much higher level and intensity than it was before," he threatens.
1.49pm: Glass half full for markets, so beware if talks falter
The latest news suggesting the US and Iran are closing in on a one-page memo to end the war marks "a significant shift in the narrative" and is "arguably the closest both sides have come to a resolution since the conflict began", says market analyst Daniela Hathorn at Capital.com.
Even without a fully detailed agreement, "the mere progress toward a framework for de-escalation is enough to alter how risk is being priced",she says.
In the near term, this development is supporting a classic risk-on reaction, with oil prices falling, bond yields easing and equities benefiting from the reduced geopolitical risk premium.
"Markets at this stage do not need a final deal as they tend to move on direction of travel, and this clearly points toward de-escalation.
"However, it is important to stress that this is still a fragile step rather than a definitive resolution.
"A one-page memo suggests that many key details remain unresolved, and past experience has shown that negotiations can quickly stall or reverse."
Markets leaning into 'glass half full' positioning "creates asymmetry", Hathorn adds.
"As optimism builds, there is less room for positive surprise and greater vulnerability to disappointment. If talks were to falter again, the reversal across oil, equities and rates could be sharp."
1.16pm: Crude oil futures slump
Brent crude oil has now dropped almost 9% to just over $100, the lowest in two weeks.
BP shares are down 3.6% and Shell's have fallen 3.2%.
Gold is surging, gaining $145 to trade at almost $4,700/oz, with Fresnillo shares up 9.3%, Endeavour 5.8%, Pan African 6.4% and Hochschild 6%.
The rise in gold is "on the idea that upward pressure on inflation is fading," says market analyst Kenny Polcari at Slatestone, which means the pressure on the Federal Reserve and other central banks is also fading, ie "possible rate cuts are back on the table".
The key is only that this is "possible", he stresses, with no deal between Washington and Tehran yet agreed, let along proof of easing inflation pressure.
Alongside that, bonds are being bought, causing yields to decline significantly, even UK ones.
The US 2yr Treasury is down 7 basis points at 3.86%, the US 10yr is down 7bps at 4.34%.
As for gilts, the 2yr has slipped just 1bp to 4.40% but the 10yr is down 9bps at 4.977% and the 30yr 6bps at 5.678%.
12.49pm: Stocks on a stormer
The FTSE 100 is on an absolute stormer today, seemingly heavily resting on the hope that Donald Trump and his negotiators can get a deal signed with Iran soon.
A gain of 2.6% for the London index is below the 2.8% leap for the German DAX and the 3.3% ad 2.9% surges for France's CAC and Spain's IBEX.
The pan-European Euro Stoxx 600 is up 2.6%, with big risers including jeweller Pandora, travel names TUI, Ryanair and easyJet; air engineers MTU Aero Engines, Safran and Rolls-Royce; and gold miners.
"It should be no surprise that this is even better news for the UK and Europe than it is for the US," says market analyst David Morrison at Trade Nation.
If the US-Iran are as close as reported to agreeing to a one-page memo to end the war, and this leads to the reopening of the Strait of Hormuz, "that will remove a significant chunk of uncertainty out of financial markets."
12.16pm: US and Iran move closer to agreement to end war
A report suggests the US and Iran are moving closer to a potential agreement to end the conflict.
According to Axios, US officials say they believe they are close to "a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations".
Both sides expected to respond on key points within 48 hours. While no deal has been finalised, this is described as the closest progress since the war began.
The proposed framework would include a pause on Iran’s nuclear enrichment, phased sanctions relief from the US and a gradual reopening of the Strait of Hormuz.
However, significant uncertainty remains, with divisions inside Iran and scepticism among some US officials raising doubts over whether an agreement can be reached.
12.12pm: Gold factors to watch
Gold is in focus today, with spot prices up to their highest in over a week at $4713 an ounce.
The market apparently spent much of the first quarter braced for bad news on central bank selling, which didn't come.
According to the World Gold Council's gold demand trends report, central banks bought 244 tonnes on a net basis, a 3% increase on the same period a year earlier.
UBS precious metals strategist Joni Teves, who expected the multi-year buying trend to continue, was surprised by the size of the number.
That matters for sentiment more than it does for price. And understanding that distinction is key to reading where gold goes from here.
"Even if central banks are not the marginal price-setters day to day, persistent net buying can help anchor market confidence, helping investors gain conviction to maintain or add exposure through periods of dollar strength and elevated real rates. It also illustrates how headlines around selling can have an outsized impact," Teves says.
If a shift from steady accumulation to net liquidation is perceived, it "would not just change physical balances; it would challenge a key stabilising assumption in gold's narrative and affect investor sentiment".
While physical gold markets tend to be quieter during the second quarter, "it will be interesting to see how participants in China will react to gold prices closer to $4500 when they return from holidays later this week."
11.45am: US vape ruling bodes well for BAT
A positive for British American Tobacco has been spied by Jefferies after the US FDA approved startup Glas Inc's applications for two fruit-flavoured age-gated eVapour products.
This is "a de-facto reversal of a 2020 US ban on fruit-flavoured eVapes", says analyst Andrei Andon-Ionita.
He sees this as a positive for BAT, the largest legal US eVapour player.
"The news could also suggest a renewed prioritisation of broader Next-Gen Product FDA applications," he says, adding that this would represent a positive for BAT and rivals Philip Morris and Altria's pending oral nicotine pouch applications.
11.17am: Prices rocketing, suggesting BoE might need to hike
The earlier UK services PMI, which was revised up from the already resilient flash release, suggests that growth "seems to be holding up despite the ongoing war in Iran", says economist Rob Wood at Pantheon Macro.
"Some of the output gains will be temporary, resulting from firms bringing forward orders ahead of future supply disruptions," he adds, with backlogs of work falling by the most in six months.
While he says there needs to be some caution about seasonal adjustment when Easter timing changes, the April PMI is consistent with 0.2% quarter-to-quarter growth in UK GDP, not far off 0.3%.
On the downside, price pressures are "rocketing", he says, though the survey data might be slighly overstating the inflation acceleration.
"But all the survey indicators of inflation pressure that we monitor have risen sharply in March and April, suggesting strong and rapid pass-through of energy costs to underlying inflation."
All told, Wood thinks the PMI "provides more reason for the MPC to focus on surging prices rather than weakening activity."
He expects two BoE rate hikes this year, "followed by three cuts across 2027 and early-2028."
10.56am: Former WH Smith high street stores may close
Former WH Smith high street stores, now branded TG Jones, are at risk of closure as new owner Modella Capital prepares a sweeping restructuring to avoid insolvency.
Modella is set to propose reduced or zero rent for up to three years across around 100 of the 380 shops across the estate, after a sharp downturn in performance, the Retail Gazette has reported.
Many landlords may refuse, raising the prospect of store closures and job losses.
Eight stores are expected to shut immediately, with more than 100 facing rent holidays and several hundred others subject to reductions.
The plan requires approval from 75% of creditors, though a court could still force it through if administration is deemed the only alternative.
10.22am: Notable movers
Some smaller cap share movers now.
Shares in Reach, the publisher of dailies the Mirror, Express and more than 100 regional titles, fell 10% after it reported a 6.9% fall in group revenue in the first quarter, with digital income declining sharply as Google search and referral traffic continued to deteriorate. Digital revenue fell 8.1%, with indirect revenues, primarily programmatic advertising, dependent on traffic volumes, down 10.5% and direct revenues off 4.5%.
EnergyPathways flared 24% higher after the UK energy transition company was awarded a gas storage licence by the North Sea Transition Authority for its MESH project in the East Irish Sea. The licence covers a substantial offshore area capable of supporting up to 60 large-scale salt caverns, with the potential for multi-terawatt-hour-scale storage, subject to consents and financing.
Seeing Machines shares revved up 11% after a record quarterly production update. This has prompted analyst Oliver Tipping at Peel Hunt to declare: "The advent of the general safety regulation in Europe has finally delivered the hockey stick jump in volume management has been predicting."
9.55am: Services PMI improves, but prices charged hits 3yr high
UK service sector activity increased last monnth, with the purchasing managers' index (PMI) increasing to 52.7 in April from 50.5 in March, above the flash estimate of 52.0
Added to the manufactuyring PMI from last week, the S&P Global/CIPS composite PMI rose to 52.6, from 50.3 in March, and above the flash estimate
Data were collected between April 9 and 28.
"April data signalled a modest recovery in UK service sector output growth after the considerable loss of momentum seen in March," says Tim Moore, economics director at S&P Global Market Intelligence, which produces the survey.
"However, this improvement could easily prove short-lived as new business intakes remained subdued in comparison to the start of 2026."
Services sector companies widely noted that the Middle East conflict and subsequent global supply chain disruptions had "weighed heavily" on business and consumer confidence, he adds, with respondents recording the fastest rise in average cost burdens since November 2022 - overwhelmingly linked to greater transportation bills and increased salary payments.
However, business activity expectations for the year ahead edged up slightly from March's nine-month low.
"A number of firms also noted that they had brought in fuel surcharges for their customers, which led to a spike in prices charged inflation across the service economy to its highest for over three years in April."
9.47am: Private credit warning
Bank of England Andrew Bailey and the Financial Stability Board have warned of rising risks in so-called “shadow banking”, with a new regulatory report flagging the rapid growth of private credit as a potential threat to financial stability.
The Switzerland-based FSB has published a report this morning, 'Report on Vulnerabilities in Private Credit', which said the market is now estimated to have grown to $1.5-2 trillion and become increasingly intertwined with banks, insurers and pension funds, raising the risk of contagion in a downturn.
Available data suggests direct exposures of around $220 billion of drawn and undrawn bank credit lines to private credit funds, while some commercial estimates range from $270-$500 billion.
"While the growth of private credit may bring benefits, it also affects potential vulnerabilities. Private credit at its current size and scope has not been tested during a severe economic downturn, which could expose leverage and borrower credit quality vulnerabilities," the report said.
Private credit could "amplify strains in stress" in adverse scenarios, the FSB added, with "data gaps" making risks harder to track.
The warning follows losses tied to the collapse of Market Financial Solutions, underlining how quickly problems can spread, with HSBC and Barclays reporting losses in their recent results.
The FSB is chaired by Bank of England governor Bailey, with the FSB Secretariat located in Basel, Switzerland.
9.11am: Death, taxes, Trump and Next
After just over an hour, the FTSE 100 is continuing to add to its initial surge, up 1.7% now.
Miners are driving the big truck higher, with Fresnillo, Anglo American, Anto and Endeavour all romping up 5-6%, with Rio Tinto only slightly lagging at 4.2%.
Diageo is up 4.4%. Analyst Edward Mundy at Jefferies says organic sales were "slightly ahead of expectations with strong growth in Europe, Latin America and Africa and less negative performance in North America, with some benefit from phasing ahead of FIFA and with Easter".
CEO Dave Lewis has promised to unveil his new strategy on 6 August, which Mundy says "will provide both an earnings floor and a plan to reset the trajectory from here".
Summing up the overall mood, market analyst Neil Wilson at Saxo says: "There are three things certain in life – death, taxes and a TACO", ie 'Trump Always Chickens Out'.
"Global stock markets have hit all-time highs as President Trump hailed 'great progress' towards a deal with Iran to end the war, whilst he paused efforts to guide commercial ships through the Strait of Hormuz after barely a day.
"No battle plan survives first contact with the enemy but ‘Project Freedom’ seems to have been dropped with unseeming haste... European stock markets advanced +1% in a broad risk-on rally."
Actually, he says there are "four things certain in life – death, taxes, TACO and that Next will always beat and raise guidance".
The UK retail bellwether's shares are now up 1.3%, after an initial fall.
Full price sales growth of 6.2% in the first quarter, was well ahead of estimates and adds £8 million in profit.
While international sales took a hit from the conflict in the Middle East, management note a "significant recovery" in recent weeks and seems relaxed about handling the increase in costs.
8.44am: Trainline falls on guidance
Trainline shares have slumped 7.1% this morning as the digital ticketing group reported profit ahead of expectations for the past year but set out an 2027 outlook that was below consensus forecasts.
Net ticket sales are expected to be £6.2-6.45 billion for the current year, with revenue of £440-455 million and adjusted EBITDA of 2.9% of net ticket sales, with international consumer expected to break even.
"The good news is that the FY27 EBITDA guide is c2-3% ahead of consensus, with company guiding to lower than expected marketing costs in Spain as it pivots to profitability," says analyst Sean Kealy at Panmure Liberum.
"There has also been an impact in the market from reduced rail travel following the train accidents earlier this year."
8.32am: UK govt bonds remain in focus this week
While shares are up sharply this morning, with the FTSE 100 and major mainland European indices all up over 1%, UK gilt yields (aka government borrowing costs) remain elevated.
The bond market is eyeing tomorrow's local elections across the UK, with yesterday seeing the 30-year gilt yield hit its highest level since 1998, at one point exceeding 5.8%, up 8 basis points on the day, with a similar rise in 10-year and others.
"What made Tuesday’s sell off particularly worrying was that it happened in isolation," says market analyst Kathleen Brooks at XTB.
"There was no major sell off in bond markets in the US or Europe, and UK yields also decoupled from the oil price, UK yields rose even as the price of crude oil fell."
She says that when bond yields decouple from their peers, it typically signals a "rising local risk premium, such as a credibility issue and/or a potential funding crisis".
The local elections do not change the number of seats that Labour or any of the opposition parties have at Westminster, but "they will be important to gauge sentiment towards the UK’s traditional two party political system", with some predictions that Reform, the Liberal Democrats and the Greens could take two-thirds of Labour's council seats, and the Conservatives could lose half.
It could "trigger a near-term political crisis for the UK", and lead to even louder calls for Kier Starmer to step aside as Prime Minister, along with Chancellor Rachel Reeves.
"However, a stronger performance for the Labour party that silences Kier Starmer’s critics and solidifies his position in 10 Downing Street could trigger a decent reversal in UK yields and a recovery in sentiment towards the UK."
8.14am: FTSE 100 vaults 150 points higher
The FTSE 100 has vaulted 151 points higher to 10,371 in opening trades, more than wiping out all the losses from yesterday in 10 minutes.
All but eight of the index constituents are in green, (Smith & Nehpew is leading the fallers, along with BP, Shell and Next.)
Diageo is top of the early risers, up 4.7% as investors toast progress in its update.
Miners and banks are next, with Antofagasta, Anglo American and Fresnillo climbing over 4% as copper, gold and other commodities are boosted by hopes that Trump's statement will lead to concrete progress in the Gulf.
7.59am: Wetherspoon's warns on profits
JD Wetherspoon has reported steady sales growth for the past quarter but warned rising costs could leave profits slightly below market expectations.
The pub group said like-for-like sales rose 3.4% in the 13 weeks to 26 April, with total sales up 4.1%. Year-to-date, like-for-like sales increased 4.3%, while total sales rose 4.9%.
The company continues to expand its estate, opening eight pubs and selling eight so far this year. It now operates 794 managed sites, alongside 21 franchised pubs, with further openings planned at major transport hubs including airports and central London stations.
7.48am: Next hikes profit outlook
Next has upgraded its full-year profit guidance after a stronger-than-expected start to the year, though it has set aside a larger amount for disruption from the Middle East conflict that is continuing to drive costs higher.
The FTSE 100 clothing retailer said full-price sales rose 6.2% in the first quarter, ahead of its 4.0% forecast and generating an extra £28 million of revenue.
That outperformance added £8 million to profit, lifting full-year guidance for pre-tax profit to £1.218 billion from £1.21 billion, with the difference driven by "exceptionally strong" trading before the Iran war broke out.
7.33am: Diageo sales turn positive
Diageo has expressed confidence in hitting full-year sales targets, after continued weakness in North America did not prevent overall sales from turning positive in the past quarter.
The maker of Guinness, Smirnoff and Captain Morgan reported net sales of $4.5 billion for its third quarter to 31 March, up 2.3% versus a year ago, with organic growth of 0.3%. This was a turnaround from the 4% decline in net sales in the first half, when organic sales were down 2.8%.
Sales volumes grew 0.4%, while price and mix declined slightly.
7.24am: Markets recover poise, but prospects for Iran deal 'unclear'
Markets have "recovered some poise over the last 24 hours, with global equities and bonds advancing," says Jim Reid, macro strategist at Deutsche Bank.
He sees "several drivers" for this, but the chief one being "clear signals that the US-Iran ceasefire was still in place even after some recent skirmishes", which helped oil prices to come back down again and ease fears about a renewed escalation and the potential for an extended stagflationary shock.
"Moreover, that optimism got a boost from the latest US data, which cemented the case that the conflict’s wider economic impact was still fairly muted."
While Trump has paused the US-led effort to help ships exit the Strait of Hormuz to see whether or not a deal can be finalised comes "even as prospects for resolution remain unclear," says Reid, with Iran’s President calling American demands "impossible" yesterday.
Reid says yesterday’s other major narrative, has continued into Asia hours, "one of optimism on chipmakers", following strong results from AMD overnight, as well Super Micro Computer after the US close.
7.15am: FTSE 100 set for big jump at open
A big jump in the FTSE 100 and other European markets are expected at the open, after Donald Trump said he is pausing efforts to move ships through the Strait of Hormuz to allow talks with Iran.
The London index has been called 111 points higher on the futures market, after it plummeted 144 points yesterday to close at 10,219.11.
Oil prices and government bond yields fell overnight after President Trump made the announcement on social media, which he said was based on the request of Pakistan and other countries and after "great progress has been made toward a complete and final agreement with representatives of Iran."
He said, "we have mutually agreed that, while the blockade will remain in full force and effect, Project Freedom (the movement of ships through the Strait of Hormuz) will be paused for a short period of time to see whether or not the Agreement can be finalized and signed."
Brent crude has dropped 2% to $107.65 a barrel, down from almost $115 at the start of the week.
US stocks closed higher overnight, with the S&P 500 and Nasdaq climbing 0.8% and 1% to fresh record highs, led by continued strength in the tech sector. The Dow Jones rose 0.7%.