Weekly Market Round-Up: Global Resilience Amid Trade Tensions – What’s Driving the Markets This Week?

As we step into the second week of March 2025, global markets have exhibited a blend of resilience and uncertainty, driven by various factors, including trade tensions, global economic data, and corporate developments. Let's dive into the key movements, numbers, and insights that shaped the financial markets this past week.

1. Market Movements Amid Trade Tensions

Despite facing escalating trade tensions, particularly from President Trump's threats of high tariffs on European goods, the global equity markets displayed notable resilience over the past week. While trade uncertainties linger, markets are showing signs of adaptability, albeit with increased volatility.

Global Equity Performance

• Europe: European markets posted modest gains, with Germany’s DAX gaining 0.6%, France's CAC 40 up by 0.5%, and the UK's FTSE 100 rising by 0.4%. These positive movements can be attributed to investor optimism about recovery and corporate earnings exceeding expectations in some sectors.
• United States: On the other hand, U.S. markets experienced more mixed performances. The S&P 500 entered correction territory, dropping by 10% or more from its previous peak, primarily driven by concerns surrounding the U.S.-Europe trade tensions and potential economic disruptions.
  • S&P 500: -2.1%
  • NASDAQ: -1.5%
  • Dow Jones: -2.3%
    This correction shows how sensitive U.S. equities are to trade rhetoric and geopolitical risks.

Asia's Surge

• Hong Kong’s Hang Seng Index surged by 1.7%, buoyed by optimistic market expectations surrounding China's economic recovery and its strategic push to support consumer lending.
• China’s Shanghai Composite also showed a positive response, gaining 1.2% following directives from the National Financial Regulatory Administration, aimed at stimulating consumer spending through enhanced credit card usage and lending.

These movements reflect growing optimism in Asia despite broader global uncertainties.

2. Currency and Commodity Fluctuations

Currencies and commodities were similarly affected by the trade tensions, with investors seeking safe-haven assets amidst the market uncertainty.

• U.S. Dollar: The dollar remained firm against major currencies, continuing its strong performance due to its role as a safe haven amid geopolitical tensions.
• Euro: The Euro faced downward pressure, dipping by 0.4% against the dollar.
• Gold: Gold prices reached a record high, trading at $2,993.80 per ounce, as investors flocked to precious metals amid concerns over global trade conflicts.
• Oil: Oil prices experienced volatility, with Brent crude hitting $70.35 per barrel, while WTI rose to $67.05 per barrel, buoyed by production cuts and the anticipation of higher demand as global economies slowly recover.

3. Sector Performance and Corporate Developments

While broader market indices fluctuated, some sectors and companies continued to perform strongly, driving investor sentiment and sector-specific trades.

• Technology Sector: The technology sector took a hit this week, largely due to concerns that escalating trade tensions could disrupt global supply chains and impact tech exports, especially from China and the U.S. mMajorplayers like Apple and Intel saw a dip of 2.5% on average.
• Energy Sector: The energy sector showed more stability, with oil price fluctuations offering an opportunity for growth. Companies like ExxonMobil and Chevron reported strong earnings for the quarter, boosting their stock prices by 3.4% and 2.1%, respectively.
• Retail: Retail companies also saw varied performances, especially with the mixed global economic outlook. In particular, the consumer discretionary sector saw a boost from China's increased consumer lending, lifting shares of Alibaba and JD.com by 5% and 3.2%, respectively.

4. Key Numbers and Volumes

In terms of trading volumes, U.S. exchanges saw elevated activity with a daily average volume of 5.6 billion shares traded, indicating investor nervousness and shifting market sentiment.

• U.S. Bond Market: The 10-year U.S. Treasury yield remained relatively stable at 3.8%, indicating investor caution and preference for safe-haven assets like government bonds.
• Asia’s Trading Volumes: Hong Kong and Shanghai also saw higher trading volumes, with a 15% increase in daily turnover as investors flocked to Chinese stocks following the government’s move to boost lending.

5. What's Next?

Looking ahead, market participants will continue to monitor trade talks and U.S.-Europe relations closely. The markets will be keeping an eye on:

• Potential tariff negotiations: Any updates on the U.S.-Europe trade negotiations could significantly impact sentiment.
• Economic Data: Global economic data on inflation, consumer spending, and job reports will likely dictate the short-term direction of markets.
• Central Bank Policies: Investors will also be awaiting comments from central banks regarding interest rates and economic stimulus measures to determine how long the current economic environment will last.

Conclusion

This week, global markets have demonstrated resilience despite growing concerns about trade tensions and geopolitical instability. While U.S. markets entered correction territory, Asia showed robust growth, especially in response to China’s policy shifts. Currency and commodity fluctuations continued to reflect the market’s caution, while specific sectors, like energy and retail, found growth opportunities.

Investors are cautiously looking ahead, awaiting further signals from global economic indicators and trade negotiations that will likely define the market's direction in the upcoming weeks.

Disclaimer

This article is for informational purposes only and should not be considered as financial advice. All information provided is based on publicly available sources at the time of writing and is subject to change. Always consult with a professional financial advisor before making any investment decisions.