FTSE 100 Reaches New Heights
The FTSE 100 index (^FTSE) achieved unprecedented levels on Tuesday afternoon, with European and American indices recording gains. This surge occurred despite ongoing apprehensions regarding artificial intelligence’s disruptive potential, which has recently troubled Wall Street.
After the Presidents’ Day hiatus, investors on Wall Street are acutely aware of looming uncertainties. New concerns surrounding AI’s capacity to radically transform sectors such as wealth management, transportation, and logistics have taken their toll on stock prices.
The Dow (^DJI) and S&P 500 (^GSPC) have experienced declines in four of the last five weeks amidst this tumult.
This shortened trading week brings a plethora of economic data that was delayed due to the partial US government shutdown.
Of particular interest is the December report of the Personal Consumption Expenditures (PCE) index, set for release on Friday, especially following less-than-anticipated consumer inflation figures.
In the United Kingdom, market participants are now factoring in an increased likelihood of an interest rate reduction from the Bank of England, driven by weaker job statistics.
The unemployment rate has escalated to 5.2%, the highest it has been in five years, while wage growth—a critical figure for monetary policymakers—has shown signs of deceleration.
“The Bank of England’s favored gauge of private sector wage growth has decreased to 3.4%, aligning with expectations, while broader indicators that encompass bonuses indicate a more pronounced slowdown.
Wage growth is now edging closer to levels conducive to achieving the 2% inflation target compared to a year ago,” remarked Jake Finney, a senior economist at PwC UK.
“With excess labor capacity accumulating and inflation trending favorably, the case for additional rate reductions is gaining strength. A move as early as March cannot be dismissed,” he added.
Recent data also indicated economic growth stagnated at a mere 0.1% in the fourth quarter of 2025, a factor of considerable significance for the decision-makers at Threadneedle Street.
Interestingly, while this data led to a decline in the pound’s value, the equity markets remained buoyant.
- London’s leading index rose by 0.4% by the closing bell, although mining stocks took a beating, with Antofagasta (ANTO.L) plummeting over 6% as precious metals prices fell.
- The more domestically oriented FTSE 250 (^FTMC) saw a slight increase of 0.2%.
- In Germany, the DAX (^GDAXI) rebounded by 0.5%, recovering from previous losses, as inflation was confirmed at 2.1% earlier that day.
- France’s CAC 40 (^FCHI) advanced by 0.3%.
- The pan-European STOXX 600 (^STOXX) registered a modest gain of 0.2%.
- The pound depreciated by 0.8% against the dollar (GBPUSD=X), trading just above the $1.35 benchmark, following a steep decline after the jobs data was released. Over the last five sessions, sterling has declined around 1.1% against the greenback.
- In the United States, the Nasdaq Composite (^IXIC) remained nearly unchanged after a shaky start, while the S&P 500 (^GSPC) increased around 0.1%. The Dow Jones Industrial Average (^DJI), encompassing fewer technology firms, added 0.3%.
Source link: Uk.finance.yahoo.com.
