The FTSE 100 jumped on Monday as investors cheered a breakthrough in Washington that could end the government shutdown, which is starting to have a real economic impact on the US.
London’s leading index was trading 0.9% higher at the time of writing.
“Glimmers of hope that an end might be in sight to the longest running US government shutdown in history put markets in a positive mood,” said AJ Bell investment director Russ Mould.
“A vote in the Senate is an important first step but any agreement still needs to clear a vote in the House of Representatives along with several other hurdles. A key impact on the markets of the impasse, beyond the hit to the wider economy, has been the lack of data as key releases on areas like the jobs market have been delayed.”
The news will be welcomed by stock traders who were hit by several sharp selloffs last week amid concerns about AI valuations.
S&P 500 futures were trading 0.8% higher at the time of writing.
Today’s FTSE 100 rally takes the index back within touching distance of all-time highs, as its defensive attributes helped it avoid the worst of the volatility last week.
Diageo was the FTSE 100’s top riser, storming 7% higher, on the news that former Tesco CEO Sir Dave Lewis would take up the role of CEO at the drinks giant.
“Diageo has named Sir Dave Lewis as its next CEO, effective January 2026, opting for an external hire over interim chief Nik Jhangiani,” explained Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“Lewis brings deep experience in consumer brands from his time leading Tesco and decades at Unilever, though he lacks direct exposure to the spirits industry. Investors may welcome his strong marketing pedigree, but any major strategic reset will take time, leaving near-term focus on navigating tough trading conditions.”
Gold’s rally saw Fresnillo 5% higher on Monday as the precious metals miner attempted to re-establish its meteoric rally.
“Gold surged on Monday, reaching its highest level in three weeks as renewed expectations of a Federal Reserve rate cut and persistent geopolitical tensions lifted safe-haven demand,” said Van Ha Trinh, Financial Markets Strategist at Exness.
Polar Capital Technology Trust shares were in demand as investors positioned for a rebound in US tech stocks after last week’s declines. The trust was 4% higher.