Quarterly Market Update - 31 March 2025
The Correction We Had to Have
At the start of 2025, global markets had strong momentum but also definitive signs of overexuberance. The uncertainty around the impact of tariffs and soft economic data has weighed on consumer sentiment and US equities – particularly tech stocks – have lagged stocks in international developed and emerging markets.
The biggest impact of tariffs on global equity markets has been in the US, where the S&P 500 has fallen by more than 7% since its peak in February, while the Nasdaq Index has fallen even harder and endured a technical correction as it has plunged more than 10% from its highs.
Trump’s trade war continues to fuel concern the US economy could stall. While most economists still do not anticipate America will fall into recession in the next year, they do say the chance of a contraction has increased. However, given that markets around the world hit record highs in2024, it is worth remembering that – like the laws of gravity – what goes up must come down. The first quarter of 2025 may well have been the correction we had to have.
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