USA

The U.S. market experienced a sharp downturn during the last week, with the S&P 500 plunging by 6%, the NASDAQ entering bear market territory, and the Dow Jones shedding over 2,200 points in a single day. This sell-off was triggered by escalating geopolitical and trade tensions, particularly the announcement by former President Donald Trump of sweeping tariffs—10% across all imports, with even higher rates for countries like China (34%) and the EU (20%). On the macroeconomic front, initial jobless claims remained low at 219,000, suggesting labor market resilience, while both Manufacturing and Services PMIs showed weakening momentum (49.0 and 50.8, respectively). These softer indicators, combined with uncertainty over the Fed’s rate path and inflationary implications of new tariffs, weighed heavily on sentiment.

Europe

European markets faced similar headwinds, with investor sentiment pressured by soft economic data and impending trade restrictions from the U.S. The Eurozone’s manufacturing PMI rose to 48.6 in March, still in contraction territory but improving. Inflation trends continued to ease across the region, but GDP growth remained tepid, constrained by ongoing external uncertainties. European indices broadly declined: the STOXX Europe 600 slipped 1.2% for the week, with Germany’s DAX 40, France’s CAC 40, and Spain’s IBEX 35 all ending lower. The FTSE 100 in the UK also weakened, reflecting the broader caution across global equity markets. The announcement of new U.S. tariffs targeting European exports added to risk-off sentiment, undermining prospects for a near-term rebound.

Japan

Japan’s macro backdrop was less encouraging, as factory activity contracted at the fastest rate in a year. The au Jibun Bank Manufacturing PMI fell to 48.3 in March, marking the ninth consecutive month in contraction territory. Despite this, firms continued hiring to address persistent labor shortages. Inflationary pressures remained present, largely driven by higher import costs. Market sentiment was rattled by weak industrial data and mounting global trade tensions. The Nikkei 225 fell 4% during the week, with the broader TOPIX also retreating. Japanese equities, having reached record highs earlier in the year, faced profit-taking and concerns about an economic slowdown, particularly as the country remains highly sensitive to shifts in global demand and trade policies.

China

China stood out with a relatively more positive economic tone. The official manufacturing PMI climbed to 50.5 in March—the highest level in a year—signaling a return to expansion, driven by a surge in new orders and production. While inflation remained subdued and consumer demand steady, the broader economy showed signs of resilience despite growing external pressure. Investors largely brushed off news of fresh U.S. tariffs, focusing instead on improving industrial activity. Equity markets responded with moderate gains: the Shanghai Composite rose to 3,348.44, while the Hang Seng Index advanced to 23,206.84. Stability in the labor market and optimistic manufacturing figures supported risk appetite in the region, differentiating Chinese equities from more fragile global peers.