The FTSE 100 shrugged off concerns about Trump tariffs and a tumultuous session for US stocks overnight to rally within touching distance of all-time highs on Wednesday.
London’s leading index was 0.75% higher at the time of writing as the sentiment dramatically improved overnight after a worrying session for US stocks.
The Trump trade has been obliterated. All the gains the S&P 500 notched up since the election have disappeared, and instead of reporting record highs for US indices – as was the case just a few weeks ago – market commentators are talking about a 10% correction.
Those who thought Trump was threatening to use tariffs only as a negotiating tactic have been proved wrong, and investors have scrambled to rejig portfolios in anticipation of a fresh trade war that is impacting some of the United States’ closest trading partners.
However, there may be a glimmer of hope that a deal could be struck between the US, Mexico, and Canada, which powered markets higher as the European session got underway.
“European and Asian markets were on the front foot on Wednesday amid hopes that Donald Trump might partially wind back tariffs if deals could be struck with Canada and Mexico,” says Russ Mould, investment director at AJ Bell.
The FTSE 100 has displayed remarkable resilience this week as tariffs come into play, with UK-centric, mining, and defence stocks leading the index higher.
This was again the case on Wednesday. Strength in the Chinese economy helped lift the mood and hopes of peace in Ukraine aided sentiment.
“After a tortuous Tuesday for global markets, investors have clung onto sparks of positivity which have helped the FTSE 100 make some gains in early trade,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“Hopes are rising that a Ukraine peace deal could be back on, China’s latest services snapshot shows promise and there are even some glimmers of possibility that some reprieve from punishing tariffs could be in sight.”
The gains were broad on Wednesday, with around 75 of the index consistently trading in positive territory.
Fresnillio was higher again, with a 5% gain after recently announcing a special dividend.
Games Workshop was the top riser after announcing it saw profit before tax ahead of expectations following a strong start to 2025. Games Workshop shares were 6% high at the time of writing.
“In a world full of uncertainty around economics, politics and consumer and business confidence, it’s refreshing to see a company be able to get on with the job of making money. Games Workshop is showing resilience in the face of a difficult market backdrop and it’s impressive how it has prospered this year,” Russ Mould said.
“Games Workshop’s recent promotion to the FTSE 100 puts pressure on management to keep delivering good news. They will want to show the world that its inclusion in the premium UK index is not a brief visit and that the business has what it takes to stay in the top league.
“Its customers are incredibly loyal and fully immersed in Games Workshop’s fantasy worlds. Some are building collections of miniature figures and others are playing the vast array of games; Games Workshop is a master at getting these customers to keep splashing the cash. At the same time, it also keeps a close eye on costs and runs an efficient ship.”
The risk-on feel to markets was compounded by weakness in utility stocks Severn Trent and National Grid who were rooted to the bottom of the leaderboard. National Grid shares were down 3% ahead of a capital markets day.