FTSE 100 on firmer ground and Rolls-Royce on a roll: All you need to know about the markets after Hurricane Trump

After Monday’s global market rout triggered by sweeping new US tariffs, stocks staged a sharp rebound on Tuesday as investors dipped back into battered names.

The FTSE 100 jumped 2.4% in early trading, clawing back a portion of its previous losses, while Japan’s Topix soared 6% in a strong overnight session.

Futures for the Dow Jones Industrial Average pointed to a gain of 3% at the open, signalling renewed risk appetite after a day that saw trillions wiped off valuations globally.

The turnaround followed what market participants have described as “panic selling” on so-called Liberation Day, when the Trump administration announced a wide-ranging series of tariffs targeting imports from Japan, the European Union, and others.

The new measures, which included a baseline 10% tariff on all imports and additional levies of 25% on cars and 24% on selected goods from Japan, hit confidence hard, particularly among US tech stocks, which led the declines.

The threat of retaliation from China, which could be targeted with some of the most punitive levies added to the sense of dismay.

In London, a number of FTSE 100-listed companies posted strong gains on Tuesday early afternoon, led by aerospace and defence group Rolls-Royce Holdings PLC (LSE:RR.), which climbed 8.05% to 686.70p.

BAE Systems PLC (LSE:BA.)s rose 6.84% to 1,599.00p, reflecting renewed investor interest in defence stocks amid geopolitical uncertainty and expected increases in government spending.

International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways and Iberia, was up 6.68% to 239.45p, helped by easing fuel price concerns and hopes that global travel disruption from the tariffs might be temporary.

Engineering and support services firm Babcock International also featured among the top risers, gaining 6.56% to 699.00p.

Games Workshop, known for its Warhammer brand, rose 5.32% to 13,060.00p, continuing to defy wider retail pressures.

Melrose Industries, the manufacturing turnaround specialist, gained 5.11% to 411.85p. Insurers and financial stocks also joined the rally, with Legal & General up 4.93% to 225.70p, Aviva climbing 4.48% to 515.00p, and M&G rising 4.43% to 180.43p.

Meanwhile, the London Stock Exchange Group advanced 4.89% to 10,815.00p, as sentiment improved across financial services.

Technology and growth-focused investment trusts also participated in the bounce: Scottish Mortgage Investment Trust added 4.71% to 853.60p, while Polar Capital Technology Trust gained 4.70% to 267.25p.

Barclays PLC (LSE:BARC) rose 4.49% to 252.68p, while Intermediate Capital Group added 4.54% to 1,682.00p, both supported by the recovery in broader financial stocks.

Although the rebound eased some of the pressure from Monday’s blood-letting, market conditions remain fragile.

Investors are now watching closely for any shift in tone from the White House or signs of moderation in tariff policy, which could determine whether Tuesday’s rally proves short-lived or marks the start of a broader stabilisation.