Market developments
Equities: Global stock markets experienced significant volatility this week, largely driven by trade policy uncertainty. Major U.S. indexes like the S&P 500 and Dow saw sharp declines, with the S&P 500 dropping over 3% on Thursday after a historic rally sparked by a temporary pause in tariffs. Despite the volatility, the U.S. market experienced one of its best weeks in the last 5 years. Overseas markets, including Japan’s Nikkei and Australia’s ASX, also fluctuated, reflecting concerns over potential economic slowdowns. Investors remain cautious as trade tensions continue to weigh on sentiment.
Fixed Income: The U.S. Treasury market faced intense pressure, with a sharp selloff pushing 10-year yields up by 17 basis points in a single day, marking one of the widest trading ranges in decades. Despite a brief pause in tariff escalations, some investors sold bonds to raise cash, raising questions about Treasuries’ safehaven status. European bond markets showed mixed responses, with German and French yields stabilizing slightly. The volatility has revived memories of past market disruptions, keeping bond traders on edge.
Commodities: Gold prices surged past $3,200 per ounce, fueled by renewed economic concerns and its appeal as a safe-haven asset. Oil prices, however, dropped significantly, with some reports suggesting a collapse to 2020 levels amid trade war fears. Other commodities, like agricultural goods, faced downward pressure as global demand outlooks weakened. The commodity market remains highly sensitive to trade policy developments and currency fluctuations.