The London stock market has reached an unprecedented peak, with the FTSE 100 surging to an all-time high of 8,979 points. This record-breaking performance is largely attributed to investor conviction in the “Taco trade” theory – a belief that Donald Trump will ultimately back down from his aggressive tariff threats. The index is now approaching the symbolic 9,000-point mark, having surpassed its previous record of 8,908.
This robust rally on the FTSE 100 is consistent with a broader wave of optimism observable across global financial markets. Traders are increasingly betting on a scenario where Trump either postpones the implementation of his announced tariffs or successfully negotiates favorable deals with trade partners, effectively averting the specter of a full-blown trade war.
The positive sentiment has translated into significant gains across various sectors, with mining companies experiencing particularly strong growth. Major players in the industry, including Anglo American, Glencore, and Rio Tinto, saw their shares rise by nearly 4%. This sectoral strength was further bolstered by an increase in global commodity prices, specifically for copper and gold, and aided by a weaker US dollar.
Even in the face of Trump’s explicit announcement of new tariffs set to take effect on August 1st, markets have maintained their bullish trajectory. Analysts explain this remarkable resilience by pointing to the “Taco trade” mindset, a seasoned understanding among investors that Trump’s historical pattern involves initial aggressive posturing often followed by a more pragmatic, market-friendly withdrawal or compromise.
London Stock Market Reaches Peak, Defying Tariff Threats with “Taco Trade” Belief
