Global Markets Slip Amid Trade Tensions; Europe Extends Gains, U.S. Dollar and Gold Firm

Global markets turned cautious to start the week as renewed trade tensions and tariff threats from the U.S. pressured risk sentiment. The S&P 500 and Dow Jones ended their multi-session winning streaks, while Nasdaq lagged on tech weakness. In contrast, European equities extended their gains, showing resilience despite global uncertainty. Asian markets remained closed due to holidays, while commodities saw mixed moves. Investors remain focused on this week’s central bank updates and key economic data.

United States

Equities:
The S&P 500 fell 0.6%, the Dow Jones slipped 0.2%, and the Nasdaq dropped 0.7%, led by losses in tech stocks. Renewed U.S. tariff rhetoric on imports fueled risk-off sentiment and profit-taking after the recent rally.

Bonds:
U.S. Treasury yields moved higher, with the 10-year rising to 4.35%, reflecting inflation concerns and caution ahead of the Fed meeting later this week.

Currency:
The U.S. Dollar Index gained 0.18%, approaching the 100.00 level, supported by haven demand and expectations of continued policy divergence.

Eurozone

Equities:
European stocks continued to rally, with the STOXX 600 marking its longest winning streak since 2021. Investor appetite was driven by strong earnings and relative insulation from U.S. trade tensions.

Bonds:
German 10-year bund yields climbed to 2.90%, following a hawkish tone from ECB members and anticipation of additional fiscal measures in core economies.

Currency:
The euro held steady around 1.1310 against the dollar, showing limited volatility amid stable regional macro conditions.

United Kingdom

Equities:
UK markets were closed due to a public holiday. The FTSE 100 will resume trading today, with investor focus on Thursday’s Bank of England rate decision.

Bonds:
The 10-year gilt yield last traded near 4.52%, with expectations of one final BoE rate hike lingering.

Currency:
Sterling traded around 1.3289 against the dollar in quiet holiday-thinned conditions.

China

Equities, Bonds, and Currency:
Mainland Chinese markets were closed for a public holiday. The onshore yuan remained stable around 7.27 per dollar, with minimal offshore activity.

Japan

Equities, Bonds, and Currency:
Japan was also closed for a public holiday. The yen traded quietly near 143.70 per dollar amid thin liquidity.

EMEA

Equities:
Central European and Middle Eastern markets posted mixed performance. South African equities fell modestly while Turkish equities gained on easing inflation expectations.

Bonds:
Yields in Hungary, Poland, and South Africa moved slightly higher, with traders awaiting regional CPI figures later in the week.

Currency:
EMEA FX traded range-bound; the Turkish lira and South African rand showed mild strength against the dollar, while the Hungarian forint was little changed.

Commodities & Cryptocurrencies

Commodities:

• Oil: U.S. crude fell to a four-year low amid oversupply concerns and slower demand expectations. OPEC+ production signals are being closely watched.
• Gold: Gold held steady above $2,300, supported by geopolitical risks and as a hedge amid equity weakness.

Cryptocurrencies:

• Bitcoin: Hovered near $62,000 with little volatility. Traders await fresh institutional inflows following recent ETF approvals.
• Ethereum: Traded sideways just above $3,000, consolidating gains from last week’s rally.

Top Performing Assets – May 5, 2025

• STOXX 600 Index: Extended gains for a ninth session in a row.
• U.S. Dollar Index (DXY): Up 0.18% on safe-haven flows.
• Gold: Held firm despite dollar strength and higher yields.