This week, investment markets continued to experience significant volatility, primarily driven by U.S. tariff policies and evolving trade dynamics. Stocks initially rebounded as President Trump moderated his stance on Federal Reserve Chair Powell and adopted a less confrontational tone toward China. The S&P 500 climbed, with tech and AI sectors leading gains. Europe’s STOXX 600 improved, buoyed by improved U.S - China relations and robust corporate earnings. Gold prices, after hitting record highs, corrected sharply after a strong run, while Bitcoin soared past $90,000, showing hints of a decoupling from equity outcomes.
Gold prices, after hitting record highs, corrected sharply after a strong run, while Bitcoin soared past $90,000, showing hints of a decoupling from equity outcomes.
Uncertainty lingers due to tariff-related concerns. The Federal Reserve has signalled caution, with markets anticipating four rate cuts in 2025 amid persistent inflation worries. Treasury yields dipped and corporate earnings were mixed with banks like JPMorgan reported strong trading revenue, while others flagged tariff-related pressures. Globally, China’s growth outlook weakened, but stimulus hopes grew. Markets remain sensitive to trade policy developments. Despite the mid-week rally in risk assets, volatility is likely to persist until trade uncertainties resolve, keeping markets on edge and investors uncertain.
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Our specialist's final thought
"Globally, China’s growth outlook weakened, but stimulus hopes grew. Markets remain sensitive to trade policy developments. Despite the mid-week rally in risk assets, volatility is likely to persist until trade uncertainties resolve, keeping markets on edge and investors uncertain."
