FTSE 100 Surpasses S&P 500: Analyzing the Ongoing Outperformance

Jordan Hartwell

Published: February 20, 2026 11:25 AM ET

FTSE 100 Surpasses S&P 500: Analyzing the Ongoing Outperformance

In recent years, the FTSE 100 has shown promising performance, notably outpacing the S&P 500. With a 21% return in 2025, including dividends, the UK index has positioned itself as a prime destination for investors seeking stability amidst economic uncertainties.

FTSE 100 vs. S&P 500: An Ongoing Trend

As of early 2026, the FTSE 100 has maintained its momentum, outperforming the S&P 500 by 5%. This trend raises questions about the potential for a sustained bull market for the index as analysts speculate on future stock performance and economic resilience.

Key Characteristics of the FTSE 100

The FTSE 100 is characterized by several factors that appeal to investors:

High Dividends: The index offers attractive yields, appealing to those who prioritize immediate cash returns.
Global Diversification: Its international reach minimizes local economic risks, although it remains sensitive to major global economies like the US and China.
Low Valuations: Many companies within the index have appealing price-to-earnings ratios, indicating potential undervaluation and room for growth.
Traditional Sectors: The index’s reliance on industries such as banking, defense, and mining suggests stability, but a lack of focus on technology sectors may hinder growth.

Future of the FTSE 100

Analysts are keen to identify which stocks might lead the FTSE 100’s continued success. One notable candidate is Rio Tinto. With a 3.95% dividend yield and a 43% increase in share price over the past year, this miner exemplifies the potential of the FTSE 100.

Rio Tinto: A Case Study

Rio Tinto’s strong performance stems from its focus on essential metals like aluminium, lithium, and copper, which are critical to the low-carbon energy sector. Additionally, iron ore, a significant component of its portfolio, plays a vital role in electricity infrastructure.

However, the company faces risks associated with its dependency on global economic conditions. A downturn could lead to decreased demand for its products, impacting its profitability.

Conclusion

The FTSE 100’s recent outperformance of the S&P 500 marks a significant shift in investor sentiment. With companies like Rio Tinto leading the charge, there is optimism that the index will continue to thrive despite potential economic headwinds.

As we look forward, the appealing characteristics of FTSE 100 stocks may provide valuable opportunities for investors seeking a mix of stable income and growth potential.