The FTSE 100 Is Outperforming Wall Street for the First Time in a Decade, Here’s Why

Early in January, on a calm morning in Paternoster Square, the LSEG headquarters ticker crossed a line it had never crossed before. Five numbers. For the first time in its 42-year existence, the FTSE 100 surpassed 10,000 points, a level that British investors had been warned to stop anticipating for the majority of the previous ten years because the London market had become, in the industry’s ugly internal shorthand, “ex-growth.” It was completely different in 2025. Quietly, the index beat the S&P 500 for the first time in almost ten years and gained 21.5%, making it its best calendar year since 2009.

In early 2024, a City fund manager would have politely laughed if you had asked if the FTSE 100 could beat Wall Street. Global equity strategists used London as a punching bag. Low valuations, capital flight following Brexit, the Norwegian sovereign wealth fund publicly selling its London book, a persistent lack of initial public offerings (IPOs), and the absence of a single Magnificent Seven-scale tech company to serve as an index anchor. It was a common joke that the FTSE 100 was a dividend-paying fossil that was unambitious, slow, and safe. Nevertheless, the fossil outran the peacock last year.

The mechanics are intriguing because they are largely unrelated to artificial intelligence. Miners, banks, defense contractors, oil majors, and major consumer staples are among the companies that made significant moves in 2025 and are heavily represented in the FTSE 100. As gold, silver, and copper reached all-time highs, the share price of Fresnillo, a precious metals manufacturer with a focus on Mexico, increased by about five times. Endeavour Mining almost tripled. When European governments finally increased defense spending, Rolls-Royce and Babcock both nearly doubled. Due to persistently high net interest income, Lloyds Banking Group nearly doubled. A developer conference has never been held under any of these names. They all made money.

In contrast, Wall Street had an excellent year that was just insufficient in comparison. The usual suspects—Nvidia, Meta, and Microsoft—led the S&P 500’s roughly 17% increase in 2025, with the Magnificent Seven carrying the majority of the weight. Both indexes were severely impacted by Trump’s tariff announcement by early April 2025, with the FTSE 100 experiencing its worst single-day decline since the pandemic began. They both got better. However, it’s difficult to ignore the fact that the FTSE’s recovery had more support than the US market’s, which was concentrated in a small number of names. Sector concentration can’t always match sectoral breadth’s ability to save indexes.

Additionally, money was helpful. Global buyers perceived sterling-denominated FTSE 100 earnings—the majority of which come from overseas anyway—as being less expensive because the pound spent a large portion of 2025 declining against the dollar. The cliché that the FTSE is “an index of multinationals that happens to be listed in London” has a purpose. Outside of the UK, FTSE 100 constituents generate about 75% of their revenue. That translation is enhanced by a weaker pound. Another boost came from the Bank of England’s cycle of rate reductions. For once, nearly everything worked in London’s favor simultaneously.

At 10,600+ in late April 2026, the question now is whether this has legs. Opponents will claim that the FTSE is just catching up after ten years of poor performance and that the story will soon come to an end if it continues to rotate back into US technology. There is a component to that. London still lacks the structural growth narrative that keeps foreign capital anchored in New York or even Tokyo, according to Morgan Stanley analysts. IPO numbers are still low. The rumored London listing of Visma would be beneficial. There would have to be more.

However, conversing with people in the Square Mile this spring has also given me the impression that a psychological shift has occurred. In a post on X, Rachel Reeves herself referred to the 10,000 milestone as “a vote of confidence in Britain’s economy.” Such optimism at the level of politicians is nearly always a sign of contrarianism. The money that is actually moving is harder to ignore. As a hedge against AI concentration, the FTSE is now subtly reintroduced into multi-asset allocations. For the first time in years, investors who are concerned about a US tech bubble are putting their diversification funds in London. It’s not a victorious rally. It’s a gradual, steady re-rating that is strangely emotional for anyone who has seen the index decline since 2016.

The real lesson to be learned from this is that London’s 2025 wasn’t about outperforming Wall Street. It was about London acting like a legitimate market once more, complete with cyclical winners, worldwide exposure, and dividends that eventually add up to something significant. The Bank of England, gold, oil, and the length of time investors remain wary of US tech valuations will determine whether that continues through 2026. However, for the time being, Paternoster Square’s ticker has accomplished something that most people had given up waiting for. It made headlines.