Banking Stocks Lead FTSE 100 Higher Amid Tariff Tensions and Federal Reserve Watch

The UK’s benchmark FTSE 100 index surged on recent trading, driven primarily by robust gains across the banking and technology sectors. The rally came as investors carefully monitored escalating trade policy uncertainties from Washington while positioning ahead of the Federal Reserve’s highly anticipated monetary policy decision scheduled for Wednesday.

Market sentiment remained mixed due to ongoing tariff threats. U.S. President Donald Trump signaled his intention to impose 100% tariffs on Canadian exports should the country pursue a separate trade deal with China. Additionally, the administration flagged plans to raise duties on South Korean imports to 25%, citing delays in the South Korean Legislature’s approval of a bilateral trade agreement with the U.S.

Countering some of this protectionist rhetoric, India and the European Union successfully finalized a Free Trade Agreement. The accord substantially reduced automotive tariffs from 110% to 10% on up to 250,000 vehicles annually, demonstrating that not all trade discussions resulted in escalating barriers.

Banking and Technology Sectors Emerge as Primary Gainers

The broader market advance was spearheaded by financial institutions. The FTSE 100 climbed 54.81 points, representing a 0.54% gain to settle near 10,203.66. Banking stocks dominated the upward movement, with HSBC Holdings advancing nearly 3%, while Natwest Group gained 2.1%. Barclays and Lloyds Banking Group posted more modest gains of 1.5% and 1.3%, respectively. Standard Chartered added 1.1%, while insurance and diversified financial services names such as Prudential climbed 2.15%.

Supporting names across the broader market also participated in the rally. Kingfisher, St. James’s Place, Spirax Group, Legal & General, Autotrader Group, Airtel Africa, and Phoenix Group Holdings each advanced between 1% and 1.7%.

Mining Sector Takes the Brunt of Tariff Concerns

In sharp contrast, commodity and mining-linked stocks struggled as investors reassessed the implications of potential trade barriers. Fresnillo tumbled more than 3%, while Antofagasta and Endeavour Mining declined 1.7% and 1.3%, respectively. Anglo American Plc shed approximately 0.7%, reflecting broad-based weakness in the sector as tariff uncertainty weighed on demand concerns for raw materials.

Divergent Performance Across Consumer and Discretionary Names

Other sectors showed uneven performance. Experian, Entain, Convatec Group, Diageo, Sainsbury, JD Sports Fashion, and Segro each fell between 0.8% and 1.7%, suggesting selective profit-taking among consumer and retail-oriented equities.

Dr. Martens’ Revenue Warning Signals Potential Headwinds Ahead

Shares of bootmaker Dr. Martens experienced a sharp reversal, plunging 12% after the company issued guidance forecasting essentially flat revenue for the full fiscal 2026. Management attributed the cautious outlook to intensifying currency headwinds, raising questions about potential margin pressures for other consumer-facing exporters.

As investors await the Federal Reserve’s policy announcement, market sentiment hinges on whether monetary conditions ease or remain restrictive, a development that could significantly influence both risk appetite and currency valuations across global markets.