Global equities closed the week a shade lower as investors considered the impact of further tariffs and weakness in the technology and communication services sectors. Markets had enjoyed a smoother start to the week with hopes that upcoming US tariffs would be lower than feared. However, the rally was short-lived when US President Donald Trump announced that sweeping worldwide tariffs would come into effect this week as well as specific levies on vehicle manufacturers.
The S&P 500 index fell -1.53% in local currency over the course of the week, once the mood music had changed on Wednesday as the US President promised reciprocal tariffs worldwide on April 2nd. While the specific details of Trump’s plans are unclear, his administration has pledged to hit countries with duties that are equal to the tariffs and non-tariff trade barriers, such as subsidies, that they impose on US exports. Meanwhile, 25% duties on imported vehicles come into effect April 3rd and key auto components are also set to be targeted early May. The levies are expected to significantly disrupt supply chains. While automakers are expected to absorb a portion of the tariff, prices will likely rise, pushing used car prices higher as a result. The yield on the US 10-year Treasury note rose to 4.27% from 4.21% a week ago.
Ceasefire negotiators involving Russia and Ukraine, mediated by the US, reportedly made progress last week with each side halting strikes on each other’s energy infrastructure. Additionally, the US revealed an agreement to stop fighting and ensure safe navigation in the Black Sea, however somewhat conflicting announcements from the two sides over the timing and details cast doubt over the agreement.
Elsewhere, UK equity markets outperformed most other developed market indices. UK inflation, as measured by the Consumer Price Index (CPI) rose 2.8% year-on-year in February, below a consensus forecast for a 3% rise, whilst core inflation rose 3.5%, down from 3.7% in the prior month.
In Asia, Japan’s stock market fell over the week with the Nikkei 225 Index registering a local currency loss of -1.48% and the broader TOPIX index down -1.67%, as US tariffs weighed on Japanese carmakers and other exporters. Mainland Chinese stock markets meanwhile ended the week little changed amid a light economic calendar and corporate earnings that broadly met expectations.
Week Ahead
| Day | Country | Measure | Period | Forecast | Previous |
| Monday | China | Manufacturing PMI | March | 50.40 | 50.20 |
| China | Non-manufacturing PMI | March | 50.50 | 50.40 | |
| Germany | Flash CPI y/y | March | 2.20% | 2.30% | |
| Tuesday | UK | Nationwide House Price Index m/m | March | 0.20% | 0.40% |
| Europe | Flash CPI y/y | March | 2.20% | 2.30% | |
| US | ISM Manufacturing PMI | March | 51.20 | 51.00 | |
| Wednesday | US | ADP Non-farm Employment Change | March | 118k | 77k |
| Thursday | Europe | Final Services PMI | March | 50.40 | 50.40 |
| UK | Final Services PMI | March | 53.20 | 53.20 | |
| US | ISM Services PMI | March | 53.00 | 53.50 | |
| Friday | US | Average Hourly Earnings m/m | March | 0.30% | 0.30% |
| US | Non-farm Employment Change | March | 139k | 151k | |
| US | Unemployment Rate | March | 4.10% | 4.10% |
Source: Bloomberg, 31/03/25
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