The FTSE 100 rallied towards all-time highs on Friday despite several risks creeping in that could derail the optimism in equity markets in the early stages of 2026.
London’s leading index was 0.5% higher at 10,203 at the time of writing as UK markets shrugged off a raft of concerns, including Trump’s pick for Fed chair, an attack on Iran, and volatility in the dollar.
“It’s a potentially big day for financial markets amid chatter that Donald Trump will announce his pick for the new Federal Reserve chair,” said Dan Coatsworth, head of markets at AJ Bell.
“Reports suggest Kevin Warsh is primed to take the role. Investors seem to be taking this as a positive sign in terms of Fed independence – with Warsh perceived as a more orthodox choice versus some of the other mooted names. He has previously served as a Fed governor and went up against Powell when he got the job of chair in 2017.
“The decline in US futures prices and uptick in the dollar reflect the thinking that Warsh won’t be a marionette for the Trump administration. It implies the chances of aggressive rate cuts in 2026 regardless of the backdrop, something which Trump has not been shy in calling for, are slimmer.”
Dollar volatility has been a key driver of financial markets this week, particularly for the FTSE 100, sending gold and silver prices to record highs and affecting London’s overseas earners.
On Friday, the dollar rebounded, sending metals prices sharply lower and pushing mining stocks into the red, weighing on the FTSE 100 index.
After breaking through $5,600 just days ago, gold momentarily fell back below $5,000 on Friday before rebounding to $5,134 at the time of writing.
Fresnillo dropped 4% while Antofagasta lost 3.3% after storming gains earlier in the week.
Airtel Africa was the top faller, sinking 7%, after releasing a strong Q3 trading statement that clearly wasn’t strong enough to spark a fresh rally after the stock tripled in 2025.
But there was enough strength elsewhere to lift the FTSE 100.
Experian, up 3%, was the FTSE 100’s top riser after announcing a fresh share buyback of $1bn, which will be music to the ears of investors who have watched the share price drift lower over the past year.
“UK-based data and tech company Experian announced a new $1bn share buyback program this morning, commencing immediately,” said Aarin Chiekrie, equity analyst, Hargreaves Lansdown.
“That’s clearly in response to its roughly 20% share price decline year-to-date as the baby’s seemingly been thrown out with the bathwater, on fears of increased competition. Underlying trends at the business remain strong, so this looks like an opportunistic way to create value for current shareholders.”
The dollar’s strength was integral to the FTSE 100’s gains on Friday, with many of the stocks that had suffered from its weakness earlier in the week rebounding.
Heavyweights AstraZeneca and HSBC were both higher by around 1%, adding a substantial number of points to the index.