Weekly Market Review: 9th June 2025

In the US, markets were generally positive last week, buoyed by strong gains in mega-cap stocks. This optimism persisted despite escalating geopolitical tensions and poor economic data, as China accused the US of “seriously violating” a previously agreed trade truce between the two nations and vowed to respond with strong countermeasures. The dispute followed President Trump’s claims that China had breached the agreement by slowing exports of rare earth minerals since the deal was signed in early May. Tensions escalated on Tuesday when President Trump doubled tariffs on steel and aluminium imports to 50%, up from the original rate of 25% imposed in March. The move is expected to impact Canada most severely, as it remains the largest supplier of metals to the US. However, tensions were somewhat eased on Thursday following the announcement that President Trump and Chinese President Xi Jinping had agreed to initiate a new round of trade talks. In corporate news, NVIDIA reclaimed the title of the world’s most valuable company on Tuesday evening, overtaking Microsoft. This was driven by strong earnings and heightened investor sentiment around AI. Since April 5th, NVIDIA has gained over $1.1 trillion in market capitalisation, rebounding from a dip to $2.3 trillion following President Trump’s “Liberation Day” announcement. Elsewhere, a group of Texas Republicans failed in their bid to impose restrictions on renewable energy projects in the state. The defeat of the anti-renewables bill underscores the ongoing support for a diverse energy mix to meet surging demand. On a broader scale, over half of the markets included in the MSCI All Country World Index reached new highs in May—the highest reading since 2021. For the week, the S&P 500 and NASDAQ closed up 1.70% and 2.28%, respectively.

In Europe, European equity markets edged higher last week, supported by economic data and monetary policy decisions, despite ongoing geopolitical uncertainty. The European Central Bank’s decision to cut interest rates was widely anticipated and further supported by May’s lower-than-expected euro area inflation, which fell to 1.9%. This marks the first time inflation has dipped below the ECB’s 2% target since September 2024. A notable slowdown in services inflation contributed to the broader decline. Additionally, the euro area unemployment rate returned to a record low of 6.2% in April. In the Netherlands, Geert Wilders—whose far-right Freedom Party won the 2023 Dutch election—resigned from the government last week, potentially setting the stage for another national election. Meanwhile, in Germany, new Chancellor Friedrich Merz is seeking to implement a €46 billion corporate tax cut, intended to last until the current coalition ends in 2029. This follows the Bundestag’s recent approval of a €1 trillion public spending package. For the week, the Eurostoxx 50 and STOXX 600 indices rose by 1.47% and 1.10%, respectively.

In the UK, the FTSE 100 posted modest gains last week as investors balanced global trade tensions with mixed UK corporate earnings. The US decision to increase tariffs on steel and aluminium had little impact on the UK, which was exempt from the hikes. In corporate developments, oil majors such as Shell and BP advanced after OPEC+ confirmed its July output increase would remain unchanged. Elsewhere, Centrica agreed a £20 billion deal to purchase gas from Norway-based Equinor over the next decade—enough to supply five million homes. For the week, the FTSE 100 closed 0.67% higher.