USA
The U.S. market experienced notable volatility during the week of March 10–14, 2025, as investors reacted to fresh economic data and rising geopolitical tensions. The Consumer Price Index (CPI) for February increased by 0.2% month-over-month, with core inflation (excluding food and energy) rising 3.1% year-over-year, its lowest reading since April 2021. This reinforced market expectations that the Federal Reserve could begin easing monetary policy in the coming months. However, labor market data painted a mixed picture, with initial jobless claims increasing to 225,000, reflecting some softening in the labor market. The University of Michigan’s Consumer Sentiment Index fell sharply to 57.9 (down 11% from the previous month), signaling growing concerns about the broader economic outlook. As a result, major U.S. indices posted significant losses, with the S&P 500 falling 2.7%, the NASDAQ declining 4% (its largest drop since September 2022), and the Dow Jones Industrial Average dropping by over 890 points (around 2%). The sell-off was largely driven by escalating trade tensions and recession fears following the announcement of new U.S. tariffs on imported steel and aluminum.
Europe
European markets faced pressure throughout the week amid heightened geopolitical uncertainty and weak economic data. The Eurozone’s GDP growth for Q4 2024 was revised down to 0.1%, highlighting sluggish economic momentum. In the UK, January’s GDP contracted by 0.1%, reflecting weakness in consumer spending and business investment. The STOXX Europe 600 Index fell 1.23% over the week, while the FTSE 100 lost 0.55% as investors weighed the economic impact of rising trade barriers. Germany's DAX 40 posted modest gains, supported by increased state borrowing and improved industrial production figures. Meanwhile, France’s CAC 40 declined 1.14%, reflecting weakness in the financial and energy sectors. Spanish equities also struggled, with the IBEX 35 down 0.95% as political uncertainty and rising bond yields weighed on sentiment. The European Central Bank (ECB) maintained its policy stance, but markets remain divided on the timing of future rate cuts given the mixed economic backdrop.
Japan
Japan's equity markets delivered modest gains, benefiting from a weaker yen and positive corporate earnings. Final Q4 GDP figures showed a 0.3% expansion (annualized at 1.2%), supported by strong export performance and resilient domestic demand. The Nikkei 225 Index rose by 0.45% for the week, while the broader TOPIX Index gained 0.27%. A weaker yen provided a tailwind for exporters, particularly in the automotive and electronics sectors. The Bank of Japan (BoJ) maintained its ultra-loose monetary policy stance, signaling that it remains focused on supporting the economy despite lingering inflationary pressures. The BoJ’s Tankan survey indicated improving business sentiment, particularly among large manufacturers. However, geopolitical tensions in East Asia and ongoing trade disputes between the U.S. and China posed risks to the outlook.
China
Chinese equities posted strong gains, driven by investor optimism and expectations of further policy support from Beijing. The Shanghai Composite Index climbed 1.8% over the week, while the Hong Kong Hang Seng Index surged 2.1%. Economic data showed signs of stabilization, with the Caixin Manufacturing PMI rising to 50.4, signaling modest expansion in factory activity. Inflation remained subdued, with February’s CPI rising 0.6% year-over-year, providing room for the People’s Bank of China (PBoC) to implement additional stimulus measures. In response to U.S. trade tariffs, China announced countermeasures targeting American agricultural and industrial goods, raising the prospect of further trade tensions. Despite the geopolitical uncertainty, Chinese markets remained resilient, buoyed by signs of increased infrastructure spending and improved consumer confidence.