Weekly Market Review: 31st March 2025

In the US, equity markets retreated last week as uncertainty abounded regarding trade policies and the wider economic outlook. President Trump’s reciprocal tariffs are due to take effect on April 2nd, with the President stating he was opposed to widescale exceptions. In trade, the US placed over 70 Chinese entities on an export blacklist, in an attempt to slow the development of advanced artificial intelligence, weapons, and other military technology. US companies who wish to trade with these blacklisted firms have to apply for a licence, which is normally rejected. Tariffs of 25% were also announced on cars and car parts on Thursday, which caused automakers such as GM to plummet over 7%. In geopolitics, the US brokered a maritime ceasefire deal between Ukraine and Russia, which will apply to the Black Sea. In corporates, NVIDIA could suffer up to $17bn in extra costs if new Chinese energy efficiency rules surrounding the use of advanced chips are enforced strictly by the state. The company’s current export chip, the H20, does not satisfy the new energy rules. In economics, GDP for the final quarter of 2024 was also revised higher to 2.4%, up from 2.3% in previous estimates due to lower overall imports. For the week, the S&P 500 and NASDAQ closed lower, down -2.82% and -3.91%, respectively.

In Europe, markets traded lower last week due to uncertainty over US trade policy. The burgeoning trade war between the EU and US entered its next phase after the announcement of 25% tariffs on all foreign-made cars and car parts into the US. Vehicle makers from across the continent registered steep losses on Thursday after the announcement. This also dragged the wider market lower, as retaliatory tariffs may now be implemented by the EU in response. However, the news of a maritime ceasefire between Ukraine and Russia bolstered hopes that a more permanent ceasefire could be achieved. In corporates, SAP, the enterprise resource management and software company, briefly became the most valuable company in Europe by market cap, overtaking Novo Nordisk. The software firm is the largest single company in Germany by market cap and accounts for a record 15% of the DAX index. SAP is now the largest technology company in Europe, overtaking Dutch-based ASML. For the week, the Eurostoxx50 and STOXX600 closed lower, down -2.44% and -1.92%, respectively.

In the UK, the FTSE 100 was flat last week, as markets reacted to tariffs and the Spring Statement. A £14bn budgetary repair package was announced by Chancellor Rachel Reeves to fill the massive fiscal hole in the UK’s public finances. The Office for Budget Responsibility did however lower its growth forecast to 1% for 2025, down from 2% in their October forecast. The FTSE 100 did react well to a lower-than-expected inflation rate of 2.8%; however, it fell on Thursday as automotive stocks such as Aston Martin retreated due to US tariffs on cars. For the week, the FTSE 100 closed 0.41% lower.