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The FTSE 100 outperformed the S&P 500 in 2025, rallying 21% YTD and recording its seventh-best annual performance on record. The lack of tech stocks wasn’t a hindrance this year, with financials and miners driving gains.
- FTSE 100 rallied 21% in 2025, outperforming the S&P500’s 17% gains.
- Winners beyond tech: Low-tech exposure paid off as financials and miners drove gains.
- 2026 outlook: cautious optimism with 10,000, in focus
- FTSE 100 technical analysis
While a rally in tech stocks and AI helped drive record highs in the US this year, the FTSE 100 has not only kept pace but also outperformed in 2025. The UK index is on track for its seventh-best year ever, with the highest returns since the aftermath of the global financial crisis.
Despite political and economic uncertainty, the FTSE 100 rallied 21% year to date as of the 23rd December, ahead of the 17.3% gains experienced by the S&P 100 across the course of the year and double what the UK index gained last year. You need to go back to 2009 to see a better annual return; that year was a recovery from the losses of the financial crisis.
The FTSE 100 rallied to a record high of 9930, benefiting from a broad diversification away from the US earlier in the year. The move in the wake of Trump’s Liberation Day tariffs, which spurred a sell America trade, fueled a rotation into – anywhere but the US. However, this tapered off towards the end of the year.
While the UK faced plenty of political and fiscal uncertainty, particularly in the lead-up to the Chancellor’s Budget on November 26, this had little lasting impact on the FTSE 100.
Instead, the FTSE proved to be a good play on global growth and inflation, given that it’s composed of cyclicals, multinationals, commodity plays, and financials.
What’s most interesting is that the FTSE has a clear lack of tech stocks, which in previous years has been a distinct disadvantage, but not in 2025. Technology firms account for just 3.5% of the FTSE, compared with approximately a third of the S&P 500. While tech stocks have been key to driving growth in international stock indices in recent years, doubts about AI spending and monetization have made the tech trade more volatile in recent months.
Fifteen of the FTSE 100 companies reported returns over 50%, including retailer Next, precious metals miner Fresnillo (+365%), and copper miner Antofagasta. Nine of the top 20 performers were in the broader financial sector.
The other noteworthy point is that the FTSE 100 rallied despite GBP/USD rising 7% across the year. A stronger pound is typically negative for the FTSE 100, as it yields a less favourable exchange rate for FTSE multinationals (80% of the FTSE 100 are multinationals).
Outlook for 2026
The question now is whether the UK index can continue outperforming. The FTSE 100 could see cautious gains in 2026, with the 10,000 psychological level a key focus.
Resilient corporate earnings, attractive dividend yields, and ongoing share buybacks are expected to be tailwinds in the near term. Meanwhile, further Bank of England rate cuts should support demand for stocks appeal relative to bonds. At the same time, the index’s global exposure provides some insulation from weak domestic growth and potential political risks ahead.
FTSE 100 Forecast – Technical
The FTSE 100 recovered from the 7535 2025 April low, rallying to a high of 9932 on November 12. The price eased back to 9425, to test the rising trendline support, before rebounding higher and is once again approaching 9900.
Buyers will look to extend gains above 9900 and 9930 to create a higher high and head towards 10,000.
Support is seen at 9700, the 50 SMA, and rising trendline support. Below here, support is seen at 9575, the October 8 high. It would take a break below 9450 to create a lower low.