London stocks are expected to open little changed on Tuesday, as investors balance signs of potential de-escalation against ongoing risks in energy markets.
Futures indicate the FTSE 100 will open 3.6 points lower at 9,890.55, after closing 0.2% down on Monday.
Donald Trump said he had “very good” talks with an Iranian official after pausing planned strikes, signalling a possible shift towards diplomacy. However, Tehran has denied the claims, and uncertainty remains high.
Reports suggest further discussions could take place this week, though the situation remains fluid, with the Strait of Hormuz still effectively restricted, keeping pressure on global energy supply.
Analysts say markets are being driven by rapid headline shifts, with sentiment swinging between escalation fears and cautious optimism.
Oil prices remain elevated, with Brent crude around $102.59 a barrel, reflecting continued supply concerns.
Elsewhere, markets showed signs of stabilisation. On Wall Street, the Dow Jones Industrial Average rose 1.4%, the S&P 500 gained 1.2%, and the Nasdaq Composite climbed 1.4%.
Asian markets also recovered modestly after heavy losses earlier in the week, as investors cautiously welcomed signs of a possible diplomatic off-ramp.
