Holly Thompson
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Trade winds shift; US assets cheer
As Trump’s second term kicks off with turbulence, markets are riding a wave of shifting policy signals, trade war tensions, and surprising resilience. From sharp equity rebounds to changing rate expectations, here’s what you need to know about a dramatic start to 2025.
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Markets swing with vibes, rhetoric and hearsay
Markets dipped after Trump said Powell’s “termination cannot come fast enough,” then rebounded as he clarified he wouldn’t fire him. The dollar recovered; PMIs were mixed.
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History in the making
Markets plunged on Trump’s tariff news, then rebounded after a pause was announced. The S&P swung sharply, bonds and oil whipsawed, and the US dollar lost ground to key currencies.
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Devil in the detail
The US tariff announcement on April 2nd caused major market losses, with the S&P 500 and Nasdaq seeing their biggest declines since 2020. Nike and Apple lost heavily due to fears of higher tariffs.
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Defensive positioning going into tariff event
Uncertainty likely to persist beyond Liberation Day. Euro held back by softer inflation. Lacking directional conviction.
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Price swings are the new normal
Weak economic data and trade uncertainty weighed on sentiment, with equities holding modest gains. Stagflation fears are replacing tariff optimism. The Fed is cautious to rate cuts, Germany’s Ifo index rose, and GBP remains resilient despite Spring Statement worries.