FTSE 100 and Wall Street Climb to New Record Highs – Is There More Room to Grow?

Global stock markets are experiencing a period of remarkable growth, with new record closes becoming increasingly common. The UK's FTSE 100 hit an all-time high of 9,645.62 on 24 October 2025, maintaining its upward trajectory alongside the New York Stock Exchange.

The year-to-date performance of London's primary equities benchmark has surged by 18.02%, outperforming the broad S&P 500 Index (+15.5%) and the Dow Jones Industrial Average (+11%) in New York. Only the tech-heavy Nasdaq Composite has delivered a higher return since the end of 2024, gaining 20.2%.

UK Stocks Show Strength and Confidence

The strong performance of the FTSE 100 reflects investor confidence and positive sentiment across markets. Notably, analysts point to the London Stock Exchange Group (LSEG) as a key buy. Its shares rose nearly 5% to £9,796 before the weekend, following robust income growth reported in the third quarter of 2025. LSEG's subsidiary, FTSE Russell, continues to maintain the FTSE 100 index.

The resilience of the FTSE 100 suggests that reaching the 10,000-point milestone is within reach. The index's appeal to income-focused investors is significant, thanks to its high dividend yields—among the highest in developed markets.

Potential Windfalls for UK Investors

UK investors are poised to benefit from substantial financial gains this year, driven by dividend payouts and share buybacks. According to the AJ Bell investment platform, the FTSE 100's total cash payouts could reach £79.4 billion, with an additional £50.9 billion allocated to share buybacks.

US Markets Continue to Shine

Across the Atlantic, the US stock market's bullish momentum is led by the so-called 'Magnificent Seven'—mega-cap technology stocks including NVIDIA, Microsoft, and Apple. These giants are among the world's most valuable companies by market capitalisation.

Investors are optimistic about the sector's prospects, driven by increasing investments in artificial intelligence (AI) and innovation. The high projected demand for AI solutions suggests sustained gains not only for these stocks but also for the broader technology sector.

US Government Supports AI Growth

The Trump administration is actively promoting US dominance in AI through its Action Plan, which includes partnerships with industry to export American AI technologies. The US aims to deliver secure, full-stack AI solutions to allies and partners worldwide. Meanwhile, LSEG is integrating its data into Microsoft 365 Copilot and other AI tools, demonstrating cross-sector innovation.

Headwinds Cloud the Outlook

Despite the positive momentum, geopolitical tensions and trade disputes threaten to dampen market enthusiasm. Recently, Canada was hit with additional US tariffs of 10%, with an exemption for imports protected under the Canada-U.S.-Mexico Agreement (CUSMA). The ongoing dispute between the US and Canada adds uncertainty to the trading landscape.

US President Donald Trump and Canadian Prime Minister Mark Carney are attending the ASEAN summit in Malaysia and the APEC forum in South Korea on 31 October 2025. Meanwhile, US Treasury Secretary Scott Bessent has confirmed a meeting between Trump and Chinese President Xi Jinping during the APEC summit.

There are signs that China may relax export restrictions on rare earth minerals, which could ease trade tensions. Bessent stated that 'the tariffs will be averted,' suggesting a thaw in US-China relations.

Resilience Amidst Global Tensions

While US tariffs and geopolitical uncertainties have unsettled markets globally, both the FTSE 100 and Wall Street have demonstrated remarkable resilience. Factors that could sustain the rally include strong corporate earnings, an inflation rate that remains better than expected, and the possibility of lower interest rates.

Outlook: More Gains on the Horizon?

The Federal Reserve is expected to announce a potential interest rate cut on 29 October 2025, following the Federal Open Market Committee (FOMC) meeting. The Bank of England's Monetary Policy Committee (MPC) will also convene on 6 November, ahead of the UK's 2025 budget presentation on 26 November.

Most market analysts predict a rate cut in December rather than earlier, which could provide further support for equities. As the year progresses, the outlook remains bullish, with many experts believing there is still room for the FTSE 100 and Wall Street to climb higher.