The FTSE 100 dipped slightly on Tuesday as investors took cash off the table ahead of the Federal Reserve’s interest rate decision.
London’s leading index was down 0.2% at the time of writing despite another fresh record high for US stocks.
The S&P 500 closed at 6,615 and is now 12% higher year-to-date – almost identical to the gains the FTSE 100 has recorded over the same period.
US tech stocks drove the S&P 500 to fresh record highs overnight, with Alphabet and Tesla storming higher. Tesla shares jumped after Elon Musk bought $1bn of Tesla stock in a move that will go a long way to quelling concerns about his dedication to the company.
Perhaps the softer moves in UK stocks were related to slightly negative sentiment around the UK jobs market, which showed more signs of deterioration in June.
“Signs of cooling are emerging in the UK labour market, but wage growth remains stubbornly high, still well above levels consistent with the Bank of England’s inflation target,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“The slight dip in pay growth and falling payrolls suggest momentum is easing, yet services inflation remains sticky, keeping rate cut hopes firmly on ice. With UK rates likely on hold as we move into 2026, markets may need to recalibrate expectations around the timing and pace of policy easing.”
The BoE’s commentary around its rate decision this week will be pored over for a signal they may act to stem the slowing jobs market with a rate cut. However, as Britzman says, this seems unlikely with inflation remaining at elevated levels.
Another fresh record high for gold fuelled Fresnillo’s extraordinary rally with a 3% gain. The precious metals miner is now up 267% in 2025 alone.
Gold bulls are relishing the prospect of a more accommodative Federal Reserve, and the yellow metal was trading near $3,700 at the time of writing.
“The market has pushed gold to all-time highs for a reason, and while the exact reason could fall on any one of many macro debates and concerns being posed by market players, the fact that gold is uncorrelated from the S&P500 and US Treasuries and is a portfolio hedge that is working well makes the investment case highly attractive,” said Chris Weston Head of Research at Pepperstone.
Haleon was the FTSE 100’s top faller with a loss of 2.8%. Easyjet was not far behind with a drop of 2.6%.