The FTSE 100 index concluded the week on a positive note, gaining over 51 points, even as mining shares faced significant declines. Investors reacted to the announcement of Kevin Warsh as the new chairman of the US Federal Reserve, which has raised questions about future monetary policy direction.
FTSE 100 Performance Overview
On Friday, the FTSE 100 closed up 51.78 points, or 0.5%, finishing the day at 10,223.54. Meanwhile, the FTSE 250 experienced a slight dip, down 15.08 points, or 0.1%, to 23,253.36. The AIM All-Share also fell by 7.39 points, a drop of 0.9%, settling at 817.53. Over the week, the FTSE 100 saw a modest rise of 0.8%, while the FTSE 250 and AIM All-Share recorded declines of 0.3% and 0.7%, respectively.
Global Market Reactions
Across the Atlantic, US markets reflected a bearish sentiment. The Dow Jones Industrial Average decreased by 0.9%, the S&P 500 fell by 0.5%, and the Nasdaq Composite dropped 0.7%. The dip followed the announcement from President Donald Trump, who nominated Kevin Warsh to succeed Jerome Powell as the chair of the Federal Reserve. Trump hailed Warsh in a social media post, calling him a potential “great” chairman and expressing confidence in his abilities.
However, analysts remain cautious. Samuel Tombs from Pantheon Macroeconomics pointed out that while Warsh’s nomination is significant, it does not guarantee a shift to looser monetary policy. He emphasised that Warsh must first navigate Senate confirmation, which could be complicated by the ongoing investigation into Powell by the Department of Justice. Goldman Sachs echoed this sentiment, highlighting potential hurdles due to opposition from Republican senators.
Key Movements in the Market
Despite the overall rise in the FTSE 100, the mining sector was notably weak, with prices for precious metals plummeting. Gold prices fell to $5,003.82 (£3,648.57) per ounce, down 4.8% from the previous day, while silver dropped a staggering 17%. Companies like Fresnillo, Antofagasta, and Endeavour Mining all reported significant losses, dragging down the sector.
Conversely, some stocks bucked the trend. Experian surged by 2.3% following the announcement of a $1 billion share buyback programme, citing strong trading performance. Lloyds Banking Group also enjoyed a rise of 3.3% amid positive commentary following its latest quarterly results. Other notable gainers included Barclays and NatWest, which rose 1.4% and 1.7%, respectively.
Economic Indicators and Future Outlook
In European markets, the CAC 40 and DAX 40 indices posted gains of 0.7% and 0.9%, respectively, buoyed by better-than-expected economic growth in the Eurozone. Eurostat reported a GDP increase of 0.3% in the fourth quarter of 2025, surpassing forecasts. Additionally, the Eurozone’s unemployment rate unexpectedly fell to 6.2%, indicating a robust labour market.
The week ahead will feature crucial economic indicators, including manufacturing PMI readings across major economies. Investors will also be focusing on interest rate decisions from the Reserve Bank of Australia, the European Central Bank, and the Bank of England, as well as upcoming US job figures.
Why it Matters
The dynamics within the FTSE 100 and global markets underscore the interconnectedness of economic policies and stock performance. Warsh’s nomination as Fed chair could signal changes in fiscal strategy that may ripple through global markets. As investors remain vigilant, the conflicting trends in different sectors highlight the ongoing volatility and uncertainty in today’s economic climate, making strategic foresight more critical than ever.
