FTSE 100 Drops as US Bond Yields Hit 24-Year High

The FTSE 100 fell 0.5% to 10,636.71 on Tuesday, pressured by US 30-year Treasury yields reaching a 24-year high of 5.60%. The spike in yields reflects investor fears that persistent inflation will force further interest rate hikes in the United States.

In the United Kingdom, Prime Minister Andy Burnham used the Labour party conference to announce a social care overhaul. He stated the initiative would be funded by adjusting the pensions triple lock starting in 2030 to remove the link to average earnings.

Global markets also reacted to geopolitical signals. Oil prices declined after President Donald Trump expressed expectations that talks with Iran would continue. However, Iranian sources privately expressed pessimism about reaching a deal to reopen the Strait of Hormuz before the US mid-term elections.

Corporate activity provided some gains. Vesuvius shares surged 25% following a £1.37 billion takeover offer from RHI Magnesita. Close Brothers rose 15% after reporting £36 million in annualised cost savings for the 2026 financial year, while British American Tobacco warned of foreign exchange headwinds for the same period.