FTSE 100 Breaks 9,000 as Investors Shift Focus to UK Markets
Britain’s blue-chip FTSE 100 index surged past the 9,000-point threshold on Tuesday, reaching a new record high of 9,016.98 in early trading. The milestone brings the index’s gains for 2025 to over 10%.
Analysts attribute the strong performance to several factors, including a shift by global investors away from US equities amid concerns over President Donald Trump’s economic policies. Ongoing trade tensions under the Trump administration have also played a role, with UK stocks gaining an edge as Britain is among the few nations to have secured a trade agreement ensuring lower tariffs.
The FTSE 100 briefly climbed to a record high of 9,016.98 on Tuesday, buoyed by optimism around the UK’s trade position. Dan Coatsworth, investment analyst at AJ Bell, noted: “With the UK having already reached an agreement on a 10% tariff for trade with the US, with exemptions for certain industries, the country is now seen to have an advantage in terms of trade relations.”
However, the rally proved short-lived. The index retreated later in the session, closing down nearly 60 points at 8,938, as a higher-than-expected rise in US inflation dented hopes of imminent interest rate cuts by the Federal Reserve.
FTSE 100 Rebounds After Rocky Start to 2025 as Investors Bet on Trump U-Turns
Donald Trump’s ongoing trade war has fuelled volatility in global markets throughout 2025. The FTSE 100 plunged to a low of 7,544 in early April after a fresh wave of tariff announcements rattled investors. However, the index has since staged a strong recovery, driven by what traders are calling the “Taco trade” — the belief that Trump tends to backtrack on market-spooking policies.
Among the standout performers this year is precious metals miner Fresnillo, which has soared over 140%, boosted by record gold prices and a 14-year high in silver.
Defence stocks have also rallied on the back of expected increases in military spending. Babcock has surged 115% year-to-date, while BAE Systems is up 65%. Meanwhile, Rolls-Royce shares have jumped 75% as the engineering group’s turnaround strategy begins to pay off.
FTSE 100 Gains Driven by Global Outlook, But Domestic Stocks Also Shine in 2025
While around 75% of the FTSE 100’s earnings are generated overseas—making it a barometer of global economic sentiment rather than the UK economy—several domestically focused stocks have delivered strong performances this year.
Lloyds Banking Group is up 38%, Next has climbed 28%, and St James’s Place has surged 40%, highlighting renewed investor confidence in UK-focused businesses. “International investors are taking notice,” one analyst noted. “With the pound stable and UK equities trading at a discount compared to global peers, private equity is ramping up deal activity and targeting undervalued mid-cap firms poised to benefit from a UK economic upswing.”
The UK stock market has outpaced Wall Street in 2025, with the FTSE 100 rising more than 10% compared to the S&P 500’s 6.75% gain. However, Germany’s DAX has led major indices, climbing over 20% on the back of plans by Berlin to boost government spending and investment.
