What’s Been Going On With the FTSE 100? The Update You Need!

If your recent investing gaze has been firmly fixed on US AI stocks (guilty as charged), it’s time to swivel it round and glance back at something closer to home: the FTSE 100. Since July 2025, Britain’s blue-chip index has been quietly ticking some big boxes, and if you’re a UK investor wanting to stay sharp, you’ll want to know what’s driving it, what risks lie ahead and where you might find opportunity.

The Big Picture: FTSE Hits New Records

Back in July, the FTSE 100 climbed above the 9,000 point mark, landing at historic highs.

What’s interesting is that this rise isn’t about home-grown UK consumer boom. It’s being driven by companies abroad (many FTSE 100 constituents earn 80%+ of revenues overseas) and by themes like commodities, defence and global exposure.

A few key drivers since July:

• Commodity & mining strength: With gold and copper prices climbing, miners such as Fresnillo, Anglo American and others have surged.
• Rate-cut hopes: Investors began to price in the possibility of Britain’s interest rates softening, improving valuations for equities.
• Undervalued UK equity story: Despite the rally, UK stocks still look relatively cheap compared to global peers, an angle some foreign investors are warming to.

Why You Need to Look Away From US AI (For a Moment)

Don’t get me wrong: US tech and AI are exciting. But by focusing exclusively on them you might be missing companies that benefit from different themes, like global commodity demand, defence spending, undervalued assets and currency moves, all of which are playing out in the FTSE right now.

For UK-based investors, this matters because:

• You’re dealing with the index in pounds, so currency movements matter (a weaker pound boosts overseas-earners).
• Dividend yields tend to be higher and valuations lower in the UK, offering a different risk-reward profile.
• Local tax wrappers (ISAs, SIPPs) make domestic equities easier to hold and manage.

Themes Worth Watching in the FTSE 100

Here are the big conversational threads that matter for you now:

1. Global-earnings exposure: Even though it’s a “UK index”, many FTSE 100 firms derive most of their income abroad. Hence global growth (or weakness) governs things more than UK GDP.

2. Commodity & resource cycle: With mining stocks dominating the recent rally, the FTSE is playing resources and raw-material supply constraints more than tech booms.

3. Valuation and yield advantage: UK equities remain reasonably priced versus some global markets. For income-seeking investors this means opportunity.

4. Domestic headwinds & watchers: Despite the overseas focus, the UK economy still matters: inflation, interest rates, UK-specific policy and UK consumer conditions remain potential drag points.

Risks to Keep in Mind

Even good runs don’t last unchecked. Here are what the smart investors are watching in the FTSE:

• Over-valuation risk: Hitting record highs may mean less upside and more potential for pull-backs.
• UK-economic drag: Consumer weakness, business investment shortfalls, inflation and interest-rate hikes could bite.
• Commodities turning: Resource stocks lead now, but if commodity cycles turn, they can drag the index.
• Currency risk: A strengthening pound hits overseas earners in sterling terms.

What Should UK Investors Do Now?

The FTSE 100 has been quietly succeeding over the last few months, but that doesn’t mean that you are too late to the party!

If you would like to add a slice of the UK market to your portfolio, here are some tips!

• Check your allocation: If you’ve been all-in on US tech, maybe it’s time to allocate a portion to UK-listed global-earnings stocks.
• Look at value + yield: UK equities may not offer the moonshot returns of some tech, but offer more reliable income and lower valuations.
• Watch sector shifts: Mining, defence, global trade, set alerts for companies operating in those themes.
• Think currency: A weak sterling helps your FTSE return; a strong sterling could erode it.
• Use your wrappers: Don’t forget ISAs/SIPPs, hold smart UK equities in tax-efficient vehicles.
• Don’t ignore the home-market: The UK market has been less sexy than US tech, but that can mean less crowded, less hyped, and potentially more value.

Final Word

The FTSE 100 has quietly reshaped itself this year. It’s no longer just “old economy, slow growth, London-centric.” It’s global, diversified, flexible, and yes, playing off the back of global trends rather than purely UK ones.

So while the US AI show is grand, UK investors shouldn’t side-line the Footsie. The value may now lie not in chasing the next rocket, but in owning the global business that’s already trading quietly under-his radar.

Time to bring the focus home, your portfolio might thank you for it.

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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.