Weekly market recap and what's ahead

17 March 2025 (recap 10 to 14 March 2025)

Key Takeaways

• Equities volatile amid escalating trade tensions; sharp recovery by week's end.
• Volatility (VIX) surged midweek but stabilized ahead of Fed decision.
• Bitcoin pressured, briefly hitting a 4-month low; altcoins follow.
• Commodities mixed; gold near record highs amid safe-haven bids.
• US dollar stabilizes as risk sentiment fluctuates.

Market Recap

Equities

US: US equities saw significant volatility due to escalating trade tensions. Early-week sell-offs hit tech and industrial sectors hardest, with sharp declines in Tesla (-15.4%) and Nvidia (-5.1%) on tariff fears (March 10). Markets rebounded strongly on Friday, driven by optimism over avoiding a government shutdown. Intel surged 14.6% on the appointment of new CEO Lip-Bu Tan, while Adobe fell sharply (-13.8%) due to weak revenue guidance (March 14).

Europe: European markets faced pressure from intensifying trade disputes, notably Trump's proposed 200% tariff on EU wines and spirits. Auto and luxury stocks, particularly Pernod Ricard (-4.12%) and Rémy Cointreau (-4.31%), were heavily impacted. Defense stocks rallied, benefiting from proposed German infrastructure and defense spending (March 13). The DAX (+1.9%) and STOXX 50 (+0.93%) ended higher on improving sentiment late-week (March 17).

Asia: Asian markets saw mixed performance amid global trade concerns and China's stimulus hopes. China's CSI 300 rallied 2.6%, driven by targeted economic stimulus measures and robust industrial output data (March 14). Japan’s Nikkei (+1.0%) followed Wall Street's rebound, though Hong Kong’s Hang Seng fluctuated on tech volatility. South Korea’s KOSPI showed resilience, supported by tech sector gains despite broader uncertainty (March 13).

Volatility

The VIX surged midweek to 27.98 amid intense tariff-related anxiety, marking its highest since December. Volatility moderated by Friday, closing at 21.98 as investor sentiment stabilized ahead of the crucial Federal Reserve meeting. Short-term volatility measures indicate ongoing caution but reduced immediate panic as markets anticipate key Fed updates and economic data (March 14).

Digital Assets

Crypto markets faced ongoing pressure, with Bitcoin briefly dipping below $77,000 before recovering modestly to $82,966 by Friday. Ethereum and Solana mirrored Bitcoin's volatility. Crypto-linked equities were mixed; MicroStrategy surged (+13%), highlighting growing institutional interest despite cautious market sentiment ahead of macroeconomic data and Fed guidance (March 17).

Fixed Income

US Treasury yields experienced volatility, influenced by shifting risk sentiment and inflation data. The US 10-year yield ended around 4.29%. European yields fluctuated significantly, with Germany’s 10-year Bund yield approaching 2.94% amid debates on fiscal stimulus measures. Japanese yields plunged due to domestic economic concerns and global tariff uncertainty (March 14).

Commodities

Gold prices briefly touched a record high near $3,000, driven by safe-haven demand amid ongoing tariff escalations and recession fears. Oil prices fluctuated but found support on geopolitical tensions, particularly regarding Iran sanctions. Copper rallied sharply, driven by fears of US tariff-induced supply constraints, while silver benefited from broader precious metals strength (March 13).

Currencies

The US dollar stabilized late-week amid reduced fears of a government shutdown, supporting its rebound. JPY weakened, reacting to volatility in global bond markets and policy uncertainties. EURUSD retreated from earlier highs amid escalating EU-US tariff retaliations and mixed macroeconomic signals (March 14).

Looking ahead (17 to 21 March)

The coming week features critical events that may drive markets:

• Fed Interest-Rate Decision (Wednesday): No rate change expected, but traders will closely watch Jerome Powell’s commentary and updated "dot plot" for policy guidance.
• Nvidia's GTC Event (Tuesday): CEO Jensen Huang’s keynote may offer insights into AI demand amid competitive pressures.
• Key Economic Data: Retail sales, homebuilder confidence, housing starts, and existing home sales reports will provide clarity on consumer and housing sectors amid tariff tensions.
• Corporate Earnings: Nike, Micron Technology, FedEx, Accenture, Lennar, and Carnival Cruise earnings could reveal further impacts from tariffs and consumer spending patterns.

Investors should prepare for continued volatility as geopolitical tensions, particularly surrounding tariffs and the ongoing Ukraine-Russia conflict, and macroeconomic uncertainties, notably concerning inflation data and central bank policy guidance, persist. Upcoming corporate earnings and the Federal Reserve's commentary will be crucial in determining market direction in the short term.