Weekly Market Review: 17th of March 2025

US equity markets declined last week as concerns over tariffs and trade policy dominated investor sentiment. Fears of a prolonged economic slowdown in the US led to a sell-off, with the NASDAQ experiencing its worst day in two and a half years last Monday. However, analysts from BNY Mellon, Jefferies, and UBS suggested that recession fears were overstated, arguing that volatility was expected under the new US administration. Markets were further shaken on Tuesday following the announcement of an additional 25% tariff on all steel and aluminium imports from Canada. However, in an unexpected reversal, President Trump rescinded the tariff later the same day. Later in the week, the administration threatened a 200% tariff on alcoholic beverages imported into the US, in response to the newly announced EU tariffs. In corporate news, Intel appointed former board member Lip-Bu Tan as CEO last week, sending shares 15% higher following the announcement. For the week, the S&P 500 and NASDAQ closed lower, down -0.79% and -0.74% respectively.

European equity markets declined as the ongoing trade war between the US and its major trading partners continued to escalate. Markets were particularly volatile on Tuesday following the announcement and subsequent reversal of additional tariffs on Canada. The implementation of EU tariffs on US products worth €26bn increased fears of a prolonged trade war. However, since these measures will not take effect until April, there is still room for negotiation. Market sentiment was somewhat lifted by hopes of a ceasefire between Ukraine and Russia. Ukraine agreed to a temporary 30-day ceasefire brokered by the US, but Russia initially refused to endorse the initiative. On Thursday, European markets were dragged lower by the US threat of 200% tariffs on alcoholic beverages, with shares of major European companies such as LVMH and Pernod Ricard falling more than 2%. In corporate developments Northvolt, the Swedish battery manufacturer, filed for bankruptcy in Sweden after failing to secure $1bn in financing. Rheinmetall, the German defense contractor, reported record orders and profits, expecting further growth as incoming Chancellor Friedrich Merz seeks to remove Germany’s debt brake to allow increased defence spending. For the week, the Eurostoxx 50 closed down -1.67% and STOXX 600 closed down -1.73%.

In the UK, the FTSE 100 traded lower for the week, experiencing sharp sell-offs early in the week due to trade uncertainty. The index was particularly affected by increased tariffs on Canada. But it rebounded later in the week as the UK opted not to retaliate against US metal tariffs—unlike the EU. Instead, the UK government pursued a conciliatory approach. For the week, the FTSE 100 closed down -0.35%.