Burberry Surges on Strategy Shift; Wall St Dips on Fed Outlook

Burberry led the FTSE 100 with a nearly 19% gain after announcing a strategic focus on core items. Wall Street closed lower following Fed Chair Powell's statement that rate cuts aren’t imminent. Electric vehicle stocks like Tesla fell on news EVs could lose their tax credits under Trump. Meanwhile, the dollar hit a one-year high, pushing gold to a two-month low.

Equities

The FTSE 100 edged up 0.5% on Thursday as markets focused on the upcoming Mansion House address by Finance Minister Rachel Reeves and anticipated comments from Bank of England Governor Andrew Bailey.

Burberry led the rally, surging nearly 19%—the largest one-day percentage gain for the luxury brand in years—after unveiling a strategic turnaround aimed at refocusing on its iconic trench coats and scarves, while scaling back ambitious price hikes on other items like bags and shoes. Aviva also showed strength, rising 4.6% after posting a 15% increase in general insurance premiums for the year’s first nine months and affirming confidence in its broader targets. Meanwhile, mining stocks lagged, with the precious metals and mining index slipping 1.9% as gold prices softened.

Across the Atlantic, Wall Street indices closed lower after Federal Reserve Chair Jerome Powell remarked that there’s no immediate need to reduce interest rates, even as inflation remains above the Fed’s 2% target. The Dow dropped 0.47%, the S&P 500 declined 0.60%, and the Nasdaq slid 0.64%.

Traders pared back expectations for a December rate cut after Powell’s remarks. The industrial sector led losses, weighed down by defence stocks. RTX Corp saw a 3.9% fall, marking its lowest level since September, while General Dynamics dropped 6.9%, reaching its lowest since October.

Walt Disney rallied 6% following a strong quarterly earnings beat and optimistic forward guidance. Among consumer discretionary stocks, Tapestry climbed 12.8% as the Coach parent announced it would terminate its $8.5 billion deal with Capri Holdings after a U.S. judge’s ruling, a move that sent Capri shares up 4.4%. In the electric vehicle space, Tesla’s stock fell 5.8%, and Rivian dropped a sharp 14.3% on news that Trump’s transition team may end the $7,500 EV consumer tax credit as part of planned tax reforms.

Forex & Commodities

The US dollar surged to a one-year high, reflecting investor expectations around the recent US election, where Donald Trump’s return to office fuelled sentiment for tighter trade policies and possible fiscal stimulus. Against the yen, the dollar climbed past 156, the highest since July, while the euro weakened to $1.0516. Sterling also softened, dropping to $1.2651, a four-month low, as markets weighed in on the implications of a more restrictive fiscal outlook.

US economic data pointed to ongoing strength, with October producer prices firming and weekly jobless claims lower, reinforcing the notion of a resilient labour market. Fed Chair Jerome Powell noted a stable economy and expressed no urgency for additional rate cuts. Market expectations for a December rate reduction fell to a 59% chance following Powell’s remarks.

In commodities, gold extended losses, hitting a two-month low at $2,562.61 per ounce, down over 4% for the week, as the stronger dollar raised the opportunity cost of holding bullion. Silver, platinum, and palladium also saw declines.

Oil prices closed slightly higher with Brent at $72.56 and WTI at $68.70 after a report from the Energy Information Administration revealed a sharp drop in US gasoline inventories to a two-year low, overshadowing a larger-than-expected rise in crude stockpiles. Nonetheless, concerns about weakening global demand growth, particularly from China, have pressured both Brent and WTI, with global supply forecasted to surpass demand in 2025, according to the International Energy Agency.