The FTSE 100 climbed to a fresh intra-day peak of 10,951.06 on Wednesday before settling at 10,908.41, up 37.39 points or 0.3 percent, leaving it a whisker below the all-time closing record of 10,910.55 set in February. The advance came while Wall Street sold off, the Dow Jones Industrial Average dropped 1.5 percent, the S&P 500 lost 0.8 percent and the Nasdaq Composite fell 1.1 percent, and as traders assigned a 34 percent probability to a Federal Reserve rate increase at 7pm London time, one of the most uncertain policy meetings in years.

The London outperformance

Oil majors carried the index. BP rose 3.4 percent and Shell 2.8 percent after Brent crude surged to $90.09 a barrel for September delivery from $84.87 late Tuesday, pushing back above the $90 threshold. The jump followed President Donald Trump’s vow to strike Iran hard after it attacked US bases in Jordan, ending a brief lull that had fed hopes of renewed talks. Weir Group led blue-chip gainers with an 8.7 percent rise on strong first-half results and better-than-expected orders, while Sage Group added 8.8 percent after an upbeat trading statement. Reckitt Benckiser gained 4.3 percent on a new buyback and accelerating like-for-like sales growth in the second quarter. The FTSE 250 dipped to 23,996.81 and the AIM All-Share fell 0.8 percent to 761.85.

The Fed's blind spot

Uncertainty centers on new chairman Kevin Warsh, who has offered no forward guidance. A clear majority of analysts expect rates on hold. Eric Winograd of AllianceBernstein said he has not seen a single credible forecaster predicting a hike, noting that June inflation and payrolls reports were both soft, making the case weaker than at the last meeting. Yet several Federal Open Market Committee members have signaled readiness to raise rates, and Warsh would likely command enough votes if he proposed it. The market’s 34 percent pricing reflects not conviction but the simple fact that nobody knows what the new chair intends.

Oil and the rest

Gold slipped to $4,011.17 an ounce from $4,035.95, dragging Fresnillo down 3.2 percent and Endeavour Mining 2.8 percent. In Europe the CAC 40 fell 0.6 percent, weighed by Hermès, while the DAX 40 edged lower. The pound softened to $1.3284 from $1.3306 and to €1.1673 from €1.1674. The euro dipped to $1.1380 from $1.1397. The dollar rose to ¥163.85 from ¥163.68. US 10-year yields climbed to 4.64 percent from 4.59 percent and 30-year yields to 5.12 percent from 5.09 percent.

What comes next

Meta Platforms and Microsoft report after the Fed decision. If Warsh holds rates, the 34 percent hike premium evaporates and the dollar’s recent bid may fade. If he hikes, the FTSE’s oil-fueled lead over a tech-heavy Wall Street becomes a sideshow to a global repricing. Either way, a central bank that communicates by mystery is a market that prices by guesswork.