Markets Rebound Amid Tariff Exemptions, but Uncertainty Persists

United States

Equities & Bonds

The S&P 500 and Nasdaq posted modest gains of 0.8% and 1.2%, respectively. These gains were fueled by a temporary pause in new U.S. tariffs on smartphones and electronics.

Despite this positive movement, investor sentiment remains fragile. Persistent trade tensions and increasing Treasury yields have tightened financial conditions, raising concerns about the U.S. housing market.

Currency

The U.S. dollar weakened, dropping below 143 yen and losing value against the Swiss franc and euro. This signals a potential erosion of its safe-haven status amid ongoing trade policy uncertainties.

Key Developments

• President Trump reiterated his opposition to Nippon Steel’s $15 billion acquisition of U.S. Steel, stressing the importance of American ownership.
• Ray Dalio, founder of Bridgewater Associates, warned that the escalating U.S.-China trade war could lead to an economic crisis worse than a recession.
• The Trump administration has significantly reduced enforcement of white-collar crime, including foreign bribery, public corruption, money laundering, and cryptocurrency-related violations.

Eurozone

Equities

European stocks experienced a sharp reversal, with the STOXX 600 index plunging 12% since April 2, 2025. The drop followed sweeping U.S. tariffs announced by President Trump.

Industries such as automotive, luxury goods, and sportswear were hit hardest. Companies like Pandora and Adidas faced notable share price declines.

Currency & Policy

The euro began to recover, approaching $1.14, as markets speculated on potential tariff retractions by the U.S. government.

In response to mounting economic pressure, the European Central Bank (ECB) is expected to implement further interest rate cuts.

United Kingdom

Equities & IPO Market

The London stock exchange is at a crucial juncture following years of lackluster performance.

Several firms, including fintech players like Ebury and Zopa, are exploring IPOs in London this year—potentially reviving interest in the market.

Currency

The British pound fell to a 14-month low, dropping below $1.21 due to concerns about the UK’s economic outlook and global bond market sell-offs.

China

Trade & Economy

China retaliated against U.S. tariffs by raising duties on American imports to 125%. This marks a significant escalation in the ongoing U.S.-China trade dispute.

According to Moody’s Analytics, weakening Chinese inflation data indicates a fragile economy under pressure.

Markets

Despite optimistic signals from President Xi Jinping about ending regulatory crackdowns, Chinese tech stocks remained mixed.

Japan

Equities & Currency

The Nikkei 225 showed volatility amid global trade tensions. Meanwhile, the yen weakened further, falling below 143 per U.S. dollar.

Economic Outlook

Japan’s economy grew at an annualized rate of 2.8% in Q4 2024, pushing 10-year bond yields to their highest levels since 2010. This has raised expectations for further interest rate hikes by the Bank of Japan.

🌍 EMEA (Emerging Markets)

Turkey

Turkey faces rising borrowing costs and inflation risks. The Turkish Central Bank is weighing critical interest rate decisions to maintain economic stability.

Egypt & South Korea

Egypt’s and South Korea’s central banks are also navigating difficult monetary policy decisions amid global economic uncertainty and trade-related stress.

🛢️ Commodities & Crypto

Oil

Brent crude oil prices dropped to $64.47 per barrel, driven by fears that the U.S.-China trade war could weaken global growth and reduce demand for fuel.

Goldman Sachs forecasts a further decline in oil prices through 2026, citing increased supply from OPEC+ and growing recession concerns.

Cryptocurrencies

Bitcoin fell to approximately $95,500, reflecting market volatility, regulatory concerns, and broader investor caution across the financial sector.

📈 Top Performers

• European Defense Stocks: Companies such as BAE Systems, Thales, and Rheinmetall gained over 7%, supported by increased NATO defense budget commitments.
• U.S. Tech Stocks: Select tech companies saw short-term gains following the temporary suspension of new tariffs.