The FTSE 100 dipped into negative territory on Thursday, threatening to break its eight-day streak of consecutive gains.
The blue-chip index experienced a drop of over one per cent in early trading, before a late-morning rally brought it back to roughly even by midday, as reported by .
London's leading shares had surged at the start of the week as President Donald Trump appeared to soften his previously aggressive stance.
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However, the President's consistent flip-flopping has left markets in a state of uncertainty.
Russ Mould, investment director at AJ Bell, commented: "While markets have been fired up in recent days amid expectations for Donald Trump to backtrack on more tariffs, investors know what he says and what he does aren't always the same thing."
He added: "It now feels like markets want solid evidence of Trump taking a more softly-softly approach before shares can rally further."
Mould also noted that investors were being "treated to a barrage of corporate news to get their heads around".
Legal & General was the biggest loser on the FTSE 100, falling five per cent as it traded ex-dividend.
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The 'Big Five' banks on the index – Natwest, Barclays, HSBC, Lloyds and Standard Chartered – all saw declines. All five are due to report first-quarter earnings next week, with tariffs expected to overshadow future guidance.
Investors remain fixated on Trump's every word
Trump's relentless criticism of Federal Reserve chair Jerome Powell has unnerved investors, exacerbating the already damaged sentiment caused by the President's drastic tariff plans.
The atmosphere took a positive turn when US Treasury Secretary Scott Bessent expressed expectations for "de-escalations" in the ongoing trade tussle between the US and China soon.
Adding to this optimistic sentiment, President Trump informed reporters in the Oval Office that the 145 per cent tariff imposed on China would "come down substantially."
Wednesday saw gold prices drop roughly three per cent, as Trump's shifting rhetoric led investors away from the traditionally secure asset.
Gold had previously reached a record peak of $3,500.05 in the session before Wednesday.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, commented: "Gold lost some of its shine as traders dipped a toe back into riskier assets, though gains in equities faded slightly into the close on lighter volumes and are expected to open a touch lower after a few comments from the White House that, big surprise, clouded the picture."
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Thursday's markets witnessed a resurgence in gold, topping $3,300 after a surge of over one percent.
In Europe, the German Dax and France's Cac40 both experienced a decline of 0.2 per cent around midday, consistent with the FTSE maintaining its edge over its Continental counterparts.
Britzman observed: "The investing world is back to hanging onto every word out of the White House, but with such a confusing and often contradictory stance on tariffs, volatility is all we can really guarantee."