FTSE 100 vs S&P 500: Why The UK Is Beating The US (YTD + Last Year)

The Numbers (So We Stop Arguing)

All returns below are price returns (index level move, not total return with dividends).

2025 full year

• FTSE 100: +21.51%
• S&P 500: +16.39%

2026 YTD

• FTSE 100: +7.60% (from 9,931.38 on Dec 31, 2025 to 10,686.18 on Feb 18, 2026 close)
• S&P 500: -0.03% (from 6,845.50 on Dec 31, 2025 to 6,843.22 on Feb 17, 2026 close)

Yes, the UK is beating the US. No, you don’t have to move to London and start eating beans for breakfast.

Why The Difference (The Boring Stuff That Pays)

1) Index Composition: UK Has Value, US Has Tech

The FTSE 100 is loaded with:

• energy (oil majors)
• banks
• miners
• staples

The S&P 500 is loaded with:

• mega-cap tech
• growth names with big expectations baked in

When the tape rewards cash flows and dividends, the UK looks like a genius. When the tape rewards multiple expansion, the US looks like a genius.

2025 and early 2026 have had a lot of "cash flow matters again" energy.

2) Dividends Are A Real Cheat Code In The UK

Even if we’re talking price return here, the FTSE’s culture is basically:

• pay dividends
• buy back stock
• don’t pretend you’re a pre-revenue AI startup

That attracts defensive money when the market gets nervous.

3) Currency And Global Revenues

A bunch of FTSE giants make money globally. When the pound moves around, those overseas revenues can look better in GBP terms.

It’s not magic, it’s accounting, but the market still buys it.

4) US Valuations Started Higher

The S&P went into 2026 with higher expectations and higher valuations.

That means:

• more downside when earnings disappoint
• less upside when results are merely "fine"

The FTSE started cheaper, so it had more room to re-rate without everyone screaming bubble.

5) Rotation, Rates, And The "Safety Trade"

When rates are sticky and the market is choppy, people hide in:

• defensives
• dividends
• banks (sometimes)
• energy (when commodities cooperate)

That is basically the FTSE starter pack.

So What’s The Market Betting On Now?

If this outperformance continues, the market is betting:

• growth stays choppy
• rates stay annoying
• value and dividends keep getting paid
• big UK multinationals keep printing cash

If the US tech trade wakes up and rips again, the S&P can catch back up fast. Just remember, the UK index is built like a tank, not a rocket.