- TACO trade? Investors broadly optimistic despite latest tariff threat
The FTSE 100 hit an intra-day high on Thursday as a surge in the value of mining shares propelled the blue-chip index towards the 9,000 mark.
Miners had suffered in the previous session after US President Donald Trump revealed 50 per cent tariffs on copper imports, driving US prices much higher as domestic buyers stocked up but weighing on London Metal Exchange prices.
But investor optimism returned on Thursday as Anglo American led the FTSE 100 with a 5 per cent surge by midmorning, followed by jumps of more than 4 per cent for Rio Tinto and Glencore.
The rebound driven by record high copper prices helped drive the FTSE 100 as much as 1 per cent higher, before gains eased to 0.9 per cent to trade at 8,950.67 by midafternoon.
Thursday’s rally brings FTSE 100 gains to 8.4 per cent since the start of 2025.
The announcement of a new chief executive at ad giant WPP also lifted the index.
The FTSE 100 is closing in on the 9,000 mark
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: ‘The President’s latest moves are seen as posturing, and there is high expectation that there will be plenty of negotiations to head off higher duties in the weeks ahead.
‘The FTSE 100 is stuffed full of multinationals which are sensitive to the outlook for the world economy and with the so-called ‘Taco trade’ in full swing, it’s benefiting from more optimism around.
‘Investors expect that Trump will ‘chicken out’ from imposing his threat. Miners have roared back to life, topping the index.’
John Woolfitt, director at Atlantic Capital Markets, added: ‘There is also an element of rotation going on as international investors are pivoting away from US tech-heavy markets and towards UK value plays, especially in mining, financials, energy and defence, which are on attractive valuations relative to their US peers.
‘Technical analysts see resistance at around the March intraday high of 8,910 with a close above this level likely to trigger a breakout over 9000.’
UK stocks followed global peers higher, amid broad optimism for the outlook on US trade tariffs.
European shares rose, lifted by signs of progress on a potential trade deal between the US and the European Union.
Germany’s DAX also rose to an all-time high, while European carmakers performed well.
It follows strength in US markets overnight amid strong gains for Nvidia and other tech giants.
Victoria Scholar, head of investment at Interactive Investor, also highlighted an improved outlook for Federal Reserve interest rate cuts.
She said: ‘Fed policy members are divided over the outlook for interest rates, having refrained from cutting all year amid concerns about an upward effect on inflation from tariffs.
‘It looks likely that at least one cut is on the cards this year with ten policymakers expecting two 0.25 percentage point reductions before year-end versus two members expecting one cut and seven anticipating no change.
‘Fed watchers will be paying attention for more clues from Fed speakers Waller and Daly later today.’
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