The FTSE 100 gained on Friday as investors digested the August Non-Farm Payroll report, which signalled a potential US interest rate cut at the Federal Reserve’s next meeting.
London’s leading index was 0.3% higher at the time of writing, while S&P 500 futures were pointing to further gains for US stocks.
Following a record high for the S&P 500 overnight on hopes of an interest rate cut this month, the Non-Farm Payrolls had the potential to upset the equity rally.
Thankfully for equity bulls, US Non-Farm Payrolls missed already low expectations and effectively nailed on a rate cut by the Federal Reserve.
US job creation has virtually ground to a halt, with only 22,000 jobs created in August. Economists had predicted 75,000 jobs would be added. Worryingly for the US economy, the June figure was revised lower to 13,000 job losses from 14,000 added.
US markets were also buoyed by a tie-up between OpenAI and Broadcom that sent Broadcom’s shares to all-time highs. OpenAI plans to develop AI chips in a partnership with Broadcom, which could challenge Nvidia’s dominance in the market.
In the UK, Cyclical stocks led the FTSE 100 as investors bought into ‘riskier’ sectors including miners, financials and industrials.
HSBC added around 2% and Rio Tinto rose around 1.5%.
There was minor strength in UK housebuilders after Halifax released data revealing the average UK house price hit a record high in August.
“Housebuilders were in demand as signs of a robust property market raises hopes for stronger earnings in the sector. Halifax says average UK prices are now at a new record high of £299,331,” said Russ Mould, investment director at AJ Bell.
“It’s not a simple green light for the sector. Interest rates arguably need to come down a lot more to convince investors that the sector has legs as mortgage affordability is still an issue for many aspiring homeowners.”
Housebuilders have had another tough year in 2025 as interest rates remain stubbornly high and many in the sector were hit with legacy costs.
That said, Berkeley Group carved out a 1% gain as Halifax’s report coincided with a trading statement in which Berkeley maintained its guidance for the year.
“Berkeley Group’s trading update this morning reflects a company managing well against a difficult backdrop, but investors should remain realistic on near term growth,” explained Adam Vettese, market analyst for eToro.
“The reaffirmation of profit targets and update that 85% of next year’s profits are already secured underscores the strength of its order book and prudent management.”