FTSE 100 snaps four-day winning streak as miners and banks weigh

What happened

The FTSE 100 fell 1.1% to 10,638.43 points on Tuesday, its steepest one-day drop in a month, ending four straight sessions of gains. Miners and bank shares led the decline ahead of US midterm elections and the Bank of England rate decision.

Confirmed

Global impact / market context

Falling miner shares cut earnings expectations as copper prices hit multiweek lows, while weaker banks reflect caution before a possible BoE rate rise. Higher rates can raise borrowing costs for companies, squeeze profit per sale and reduce cash available for spending and dividends.

Analyst inference

Investors are balancing political uncertainty from US midterms with tightening monetary policy. The BoE is expected to raise rates by 25 basis points, which means borrowing costs rise. Oil's slide and peace talks ease inflation fears but pressure energy and mining revenues.

Analyst inference

What to watch

1. The Bank of England interest rate decision on Thursday, with markets expecting a 25-basis-point hike, which means borrowing costs rise by a quarter of a percentage point. Confirmed
2. Watch whether the BoE signals one or two moves are enough, as Amundi's Alessia Berardi expects, rather than a full hiking cycle that raises costs further. Proposed
3. Track copper and crude oil moves, since lower metal and energy prices can cut revenues at miners and energy firms, weighing on FTSE 100 earnings and investor positioning. Analyst inference

Evidence

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