The trading week has kicked off on a positive note with the FTSE 100 rising to approach its record high.
Following public holidays in both the UK and US, markets have been buoyed by rising hopes the US will agree trade deals with the European Union and others, to add to that already agreed with the UK.
Investors took fright last week as Donald Trump threatened to impose a 50% tariff on EU goods from 1 June, but that was rowed back on over the weekend.
The FTSE 100 stood at around 8,800 points on Tuesday, with its record high mark being 8810 in February.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “A mood of cautious relief is spreading after the long weekend, amid hopes for more fruitful trade negotiations between the United States and its global partners.
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“There are no post bank holiday blues for the London market, with the FTSE in striking distance of the record high reached in February. More positive vibes are pulsing about the outlook for the global economy, with hopes that more scores can be etched on the doors of trade talks.
“US futures point to a higher open on indices, as optimism spreads after the holiday break,” she continued. “Trump once again has pressed the pause button, this time on proposed 50% tariffs on imports from the European Union, which caused nervousness at the end of last week.”
“The latest U-turn on tariffs from the Trump administration gave European markets a boost yesterday and have helped UK stocks return from the Bank Holiday with pep in their step,” added AJ Bell investment director Russ Mould.
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“The market is beginning to come to the view that the US trade policy’s bark is worse than its bite as an initial threat of 50% tariffs on EU goods by the beginning of next month has been pushed back until 9 July to allow time for talks to continue.
“US markets were also closed for Memorial Day on Monday and futures markets imply a recovery from Friday’s losses when trading begins on Wall Street later. The dollar ticked higher and the 30-year Treasury yield slipped back below the 5% mark as risk appetite was restored, at least to some extent.”
