FTSE 100 Advances on Positive Economic Indicators and US Legal Ruling
The FTSE 100 index closed higher on Friday, buoyed by encouraging domestic economic data and a significant US Supreme Court decision regarding tariffs imposed by former President Donald Trump. The benchmark index rose 59.85 points, or 0.6%, to settle at 10,686.89.
Market Performance Across Indices
In London, the FTSE 250 index also saw gains, closing up 178.07 points, or 0.8%, at 23,751.56, while the AIM all-share index increased by 3.97 points, or 0.5%, to 815.11. European equities mirrored this positive trend, with the CAC 40 in Paris rising 1.4% and the DAX 40 in Frankfurt ending 0.9% higher.
Currency markets showed movement as well, with the pound climbing to 1.3492 dollars from 1.3455 dollars the previous day. The euro edged up slightly to 1.1780 dollars from 1.1768 dollars, and the dollar traded marginally higher against the yen at 154.95 yen compared to 154.90 yen.
US Supreme Court Strikes Down Trump Tariffs
The US Supreme Court delivered a landmark ruling, declaring that President Donald Trump exceeded his authority by imposing a series of tariffs that disrupted global trade. In a six-three decision, the conservative-majority court stated that the International Emergency Economic Powers Act does not authorise the president to levy tariffs.
This ruling blocks a key tool Trump has used to advance his economic agenda, though it does not affect sector-specific duties on imports such as steel and aluminium. The court emphasised that Congress would have explicitly granted tariff authority if intended, noting its absence in the legislation.
Ebury analyst Matthew Ryan commented, "The Supreme Court ruling on Trump's tariffs will unlikely be a big game changer for markets. Not only was the decision broadly expected, but the president has already signalled that he will quickly pivot to other legal tools to achieve similar trade restrictions." He added that long-term tariff strategies may persist through alternative methods.
UK Economic Data Provides Boost
Back in the UK, a wave of positive economic data supported market sentiment. Retail sales surged 1.8% month-on-month in January, far exceeding the consensus forecast of a 0.2% rise and marking a significant improvement from December's 0.4% increase.
Additionally, the flash UK purchasing managers' composite output index rose to a 22-month high of 53.9 points in February, up from 53.7 in January and beating market expectations. This indicates accelerated economic activity as uncertainty from the autumn budget dissipates.
Pantheon Macroeconomics analyst Rob Wood noted, "Retail sales provide further evidence that economic activity is picking up smartly in the new year as budget uncertainty fades."
Corporate Highlights and Stock Movements
Diageo led the FTSE 100, closing 3.9% higher after reports that new CEO Dave Lewis plans major changes to the executive team, aiming to alter what has been described as a "fat and happy" culture. Segro also gained 2.0% despite a decline in pre-tax profit for 2025, as lower valuation gains offset record rental income.
On the FTSE 250, TBC Bank jumped 7.0% after reporting strong full-year results and increasing its annual dividend by 10%. Conversely, Aston Martin Lagonda shares fell 1.4% following a profit warning linked to heightened US tariffs, though the company anticipates improvement in 2026.
In the AIM market, SkinBioTherapeutics rose 8.9% as it announced an independent investigation into events leading to the CEO's departure, despite a weekly decline of 19%.
Commodities and US Market Overview
Commodity prices showed mixed movements, with Brent oil slightly lower at 71.33 dollars a barrel and gold climbing to 5,066.90 dollars an ounce. In New York, stocks were higher, with the S&P 500 up 0.4% and the Nasdaq Composite gaining 0.8%.
US economic data revealed slower-than-expected GDP growth of 1.4% in the final quarter, while inflationary pressures picked up in December, posing considerations for the Federal Reserve.
Looking Ahead
Key risers on the FTSE 100 included Diageo, Antofagasta, Burberry, British American Tobacco, and Lloyds Banking, while BP, DCC, Associated British Foods, Mondi, and Convatec were among the biggest fallers. Upcoming economic data includes US factory orders and Germany's business climate reading, with corporate results due from HSBC, Diageo, and Rolls-Royce later in the week.
