The FTSE 100 climbed to a historic peak today as worries over the potential fallout from Donald Trump’s tariff threats faded, while excitement around artificial intelligence technology captured investors’ attention.
Within just 30 minutes of the London Stock Exchange opening, the index representing the UK’s largest companies had jumped 77.34 points, or 0.87%, reaching 8944.36. This surpassed the previous record of 8908.3 set in March, pushing the index up more than 8% so far this year. Mining shares were among the top performers.
Richard Hunter, head of markets at interactive investor, explained: “Increasing cynicism about the veracity of tariff threats and a rekindling of the AI trade drove markets higher, with the Nasdaq setting a record closing high.
“Investors are apparently running with the TACO (Trump Always Chickens Out) theme, assuming that the more recent deals and negotiations which have taken place will continue to override the hefty threats emanating from the White House.
“Meanwhile, minutes from the Federal Reserve revealed that the central bank remains on alert for inflationary tariff impacts, although to date these have been limited with the economy clearly holding up. As such, the consensus is that, all things being equal, an interest rate cut may not come until the end of the year.
“The resurgence of AI euphoria boosted the mega cap technology stocks, with Nvidia briefly hitting a market cap of $4 trillion, becoming the first company to do so.
“The continuing risk-on attitude leaves each of the main indices comfortably ahead for the year despite the ‘Liberation Day’ wobbles, with the Dow Jones having added 4.5%, and the more technology influenced S&P500 and Nasdaq rising by 6.5% and 6.7% respectively.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, added: “Investors have voted with their wallets, brushing aside tariff uncertainty to send risk-on assets higher.
“If all-time highs for NVIDIA and Bitcoin are anything to go by, markets seem to be pricing in very little chance of any meaningful disruption to the bull party, at least in the near term. US markets closed higher yesterday, and European stocks have joined in this morning, with the FTSE 100 trading up at the open.
“US investors looked the other way as President Trump issued another wave of tariff letters. But uncertainty is still in the air, as investors gear up for an important earnings season in the coming weeks. So far, tariffs haven’t made a noticeable dent in inflation, but the real test is whether they’ll start to weigh on corporate earnings.”
Bitcoin also surged to a new milestone on Wednesday, breaking past $112,000 for the first time. The world’s largest cryptocurrency has gained roughly 20% this year, despite a dip below $100,000 in late June.
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