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Matthew Boxall of Team Asset Management offers this week’s market review
IT was another rollercoaster week for global financial markets as US economic data, geopolitical tensions and shifting investor sentiment painted a complex picture for investors to digest.
US stockmarket indices have now officially entered “correction territory” [the industry label used to describe a 10% fall from a high], with the S&P 500 shedding some $5 trillion in market value in just a few trading days. European investor optimism, and mixed signals from China and Canada, underscored a week of the world grappling with uncertainty.
Eyes were firmly fixed on the US again, yet data releases offered little solace to equity markets. Cooler than anticipated inflation data raised questions and hopes of a Federal Reserve rate cut, briefly lifting markets, but optimism was soon eradicated by gloomier signals.
Small business confidence extended its decline in February, coupled with a decline in the Michigan Consumer Sentiment survey, which measures how consumers view near-term prospects for their own financial situation, and their view of long-term prospects for the economy. Compounding the pressure in the US, President Trump’s escalating tariff threats on China and Canada fuelled fears of trade disruptions and creeping inflation.
US stocks bore the brunt of this uncertainty. Stocks including Tesla dropped 15% in one day and Amazon, down 14% in a week epitomising the severity of the sell-off. A Friday rebound, led by NVIDIA, ahead of its Graphic Processing Unit Conference, offered a late uplift. American chip maker Intel was up 15% following the announcement of a new chief executive. Despite Friday’s bounce, weekly losses persisted, creating a fourth consecutive loss for these major indices, underscoring that one good day cannot erase deeper investor concerns.
Across the channel, Europe offered a counterpoint. German stocks and bond yields surged after political parties agreed on significant spending initiatives. Broader European indices rallied, buoyed by hopes that a large injection of fiscal stimulus through rearming the region’s military capability and upgrading deficient physical infrastructure could meaningfully boost growth. This spending pledge has provided a lifeline to Europe’s equity markets, contrasting with the US’s struggles and highlighting Europe’s relative resilience, at least for now, as investors rotate away from expensive US equities into other overseas markets.
Elsewhere, in China, stocks are rising, capping a week of shifting dynamics in the country. Domestic and international sentiment towards China’s stockmarkets has seemingly improved in recent weeks following signals from Beijing pointing to broader consumption support, alongside strong retail sales and industrial data that exceeded forecasts.
As equities faltered, investors flocked to safe-haven assets. US treasuries climbed by late week, pushing yields lower as risk-off sentiment dominated. Gold, however, stole the spotlight, breaking through the psychological $3,000 level, achieving its 13th all-time high for 2025, while silver also rallied strongly, recording gains of almost 5% on the week. The surge was driven by investors fleeing equity volatility amid Trump’s protectionist rhetoric, reinforcing its status as a hedge against geopolitical and economic uncertainty.
Looking ahead to this week, economic events will remain the focus of investors, with markets keenly awaiting the US Federal Reserve’s rate decision today. Consensus predicts rates will hold steady at 4.5%, but President Trump’s ongoing push for cuts could spark volatility, especially if the Fed chair commentary hints at future easing.
The UK unemployment rate is expected to edge up 0.1% to 4.5%, signalling softening labour conditions, while the Bank of England’s interest-rate decision, also forecast to remain at 4.5%, will challenge borrowers adapting to higher debt costs after years of near-zero rates. Other market movers to watch include US existing home sales data, which, if weak, might dent housing-related builders and retailers as consumer uncertainties persist.
