Quick Read
- FTSE 100 closed 0.3% higher following strong US GDP data.
- US Q3 GDP grew at 4.3%, beating forecasts and tempering rate cut expectations.
- London miners led FTSE gains; European markets mixed as traders prepare for holidays.
FTSE 100 Climbs Amid Strong US Economic Growth Data
As the world’s financial engines begin to slow ahead of Christmas, the FTSE 100 managed to buck the quiet trend, closing Tuesday’s session up 0.3%. The catalyst? A surprise burst of US economic growth, revealed in delayed third quarter data that rattled expectations and sent shockwaves through global markets.
- The latest US GDP figures showed a 4.3% annualised growth rate for Q3—far outpacing analyst forecasts of 3.3%.
- This unexpected strength signaled a resilient American consumer and added complexity to Federal Reserve rate cut bets, with most market participants now expecting the Fed to pause its cuts in the near term.
Traders in London found reasons to celebrate, with mining giants Antofagasta and Anglo American leading the charge. Precious metals proved a bright spot on an otherwise muted day, as the FTSE 100 tracked gains in other major indices, even while much of Europe saw mixed results.
Global Markets React to US Data
Across the continent, the mood was cautiously optimistic. Germany’s DAX ticked up by 0.2%, while Paris’s CAC 40 slipped 0.2%. The pan-European STOXX 600 index rose by 0.4%, reflecting a broad—if subdued—confidence.
Back in the US, Wall Street’s major indices responded positively. The S&P 500 and the Dow Jones both edged higher, up 0.3% and 0.2% respectively. Even the tech-heavy Nasdaq Composite, which had earlier dipped, managed to claw back losses and finish 0.3% up.
But beneath the surface, traders were already winding down for the holidays. With most of the year’s pivotal economic reports and central bank decisions now past, the day’s movement felt like a gentle exhale—a moment to take stock before the next round of uncertainty.
Fed Rate Cut Bets Shift as Data Surprises
The shutdown-delayed GDP report didn’t just move markets—it moved minds. About 85% of traders now expect the Federal Reserve to pause its rate cuts, up nearly 10 percentage points from last week, according to Yahoo Finance. The majority still anticipate two rate cuts by the end of 2026, but the immediate outlook has grown murkier.
Why does this matter for the FTSE 100? Because global rate decisions ripple outward, shaping everything from corporate profits to currency moves. For now, the pound hovered just below $1.35, up nearly 0.1% against the dollar, recovering from a surprise dip earlier in the week after UK inflation fell sharply in November.
London’s Miners Lead, Airlines Steady
In sector news, London’s miners stole the spotlight. Antofagasta and Anglo American were among the top FTSE 100 performers, buoyed by renewed interest in precious metals. Meanwhile, Ryanair’s stock price barely budged in early trade, a sign that airline sentiment remains steady despite shifting macro headwinds.
Looking ahead, market watchers expect muted trading volumes as the holiday season sets in. But the story beneath the headlines—the resilience of the US economy and its ripple effects on global rate policies—will linger long into the new year.
Analysis: The FTSE 100’s rise is less about local optimism and more about the global pulse. The unexpected US growth data has tempered expectations for aggressive rate cuts, rebalancing risk and reward across markets. As traders pause for the holidays, the real question is whether this resilience can hold through the challenges that 2026 will inevitably bring.