Global Markets Rebound – Navigating Trade Winds & Tech Momentum

🌍 Big Picture

Global markets emerged from a cloud of uncertainty during the week of April 21–25, 2025, rallying on a wave of cautiously renewed optimism. Investors, who had been bracing for a deepening trade war and potential economic slowdown, found solace in signs of diplomatic movement and corporate resilience. The week's narrative was defined by a shift from fear-driven selling to selective risk-taking, as headlines suggested that U.S.–China tariff tensions might finally be easing.

U.S. President Donald Trump, whose earlier tariff threats had rattled markets, hinted at a potential thaw with China, suggesting that negotiations could resume. Though Beijing was quick to downplay formal talks, markets seized upon the possibility of de-escalation. This, coupled with stronger-than-expected Q1 earnings from major corporations, lifted sentiment across the board. Wall Street's rebound was led by the technology and consumer sectors, with mega-cap names like Alphabet and Microsoft reaffirming investor faith in the power of innovation even in uncertain times.

Yet, beneath the surface, macroeconomic challenges persisted. The U.S. economy grew at an annualised rate of just 1.6% in Q1 – the slowest pace in nearly two years – highlighting the toll of trade disputes and waning consumer confidence. Inflation remained stubborn, and consumer sentiment, as measured by the University of Michigan, hovered at multi-year lows. The Federal Reserve remained on the sidelines, balancing the risk of inflation against growing calls for policy support. While markets hope for a dovish pivot, the Fed is likely to hold steady, awaiting clearer signals.

In Europe, the story was similar. The ECB maintained its accommodative tone, and European equities climbed, buoyed by blockbuster earnings from firms like SAP and L’Oréal. Even as eurozone business surveys hinted at stagnation, investors chose to focus on corporate strength and the potential for additional policy easing. Japan, meanwhile, stood out as a bright spot in Asia, with the Nikkei 225 reclaiming all its April losses, helped by a weaker yen and steady BoJ support.

The overarching theme of the week: while risks remain, markets are learning to navigate uncertainty with a more discerning eye. The worst-case scenarios are no longer front and centre, and selective optimism is taking root.

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📊 Assets at a Glance

Equities:

U.S.: After a volatile start, U.S. equities closed higher. The S&P 500 gained 1.5%, led by the tech-heavy Nasdaq, which surged 2.6%. Dow Jones Industrial Average edged up 0.7%. Tech giants and consumer names were the clear winners, while materials and defensives lagged.

Europe: The STOXX 600 added 2–3% over the week. Germany’s DAX and France’s CAC 40 mirrored the gains, driven by strong corporate earnings and easing trade fears. SAP’s 10.6% jump was a standout.

Asia: Japan’s Nikkei 225 rose 2%, fueled by export optimism and a weaker yen. Hong Kong’s Hang Seng rebounded 2.3%, while China’s CSI 300 gained modestly amid stimulus hopes.

Bonds:

U.S.: Treasury yields declined as growth concerns mounted. The 10-year yield fell to 4.27%, with markets increasingly pricing in potential Fed easing.

Europe: German Bund yields remained stable near 2.7%. Peripheral spreads tightened on ECB support.

Asia: Chinese and Korean yields fell as central banks leaned dovish. Japanese yields held steady at 0.50%.

Currencies:

USD: The dollar bounced slightly, ending a losing streak. Dollar Index rose 0.1% on the week.

JPY: Weakened to ¥143/USD, providing relief for Japanese exporters.

EUR: Hovered around $1.1377, supported by ECB policy stance.

CNY: Stable near 7.05/USD, with PBoC measures underpinning the currency.

Commodities:

Oil: Brent crude closed at $66.87, down 1.6% weekly, reflecting demand concerns. WTI followed suit at $63.02.

Gold: Pulled back from record highs to $3,293/oz as risk appetite returned, yet remains elevated.

Copper: Slightly lower, as markets await firmer growth signals.

Crypto:

Bitcoin: Continued range-bound trading between $77K and $85K. XRP ETF launch bolstered altcoin sentiment.

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📅 Key Events Next Week

Monday, April 28:

Eurozone Economic Sentiment (April)

U.S. Pending Home Sales (March)

China NBS Manufacturing & Services PMI (April)

Tuesday, April 29:

Japan Unemployment Rate (March)

Germany GDP (Q1 – Preliminary)

U.S. Consumer Confidence Index (April)

Wednesday, April 30:

U.S. Federal Reserve Interest Rate Decision & FOMC Press Conference

Eurozone CPI Flash Estimate (April)

China Caixin Manufacturing PMI (April)

Thursday, May 1: (Labour Day – Market Holidays in Europe & Asia)

U.S. Initial Jobless Claims

U.S. ISM Manufacturing PMI (April)

Friday, May 2:

U.S. Non-Farm Payrolls (April)

U.S. Unemployment Rate (April)

UK Manufacturing PMI (April)

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💡 Investment Idea

Asset: Long High-Quality Technology Stocks (AI Focus)

Rationale:

Technology stocks, long considered the vanguard of market growth, have once again proven their resilience. Amidst the crosscurrents of trade tensions and macro uncertainty, leading tech firms have delivered results that defy the broader economic gloom. Alphabet’s 28% surge in cloud revenue exemplifies the sector’s strength, underpinned by a relentless drive toward AI innovation and digital transformation.

With inflation expectations tempering and interest rate hikes likely on pause, growth stocks are regaining favour. The sector's solid earnings, coupled with easing trade pressures and potential central bank support, position tech as a compelling destination for capital in the months ahead.

Key Drivers:

Robust earnings from Alphabet, Microsoft, Meta, and peers.

Sustained investment in AI and cloud infrastructure.

De-escalation in trade disputes, particularly for tech hardware.

Fed policy leaning dovish amid growth concerns.

Strategy:

Build exposure to AI leaders: Alphabet, Nvidia, Microsoft.

Broaden with tech-focused ETFs (e.g., Nasdaq-100, QQQ).

Hedge via puts or gold if trade tensions reignite.

This is a time for tactical positioning—leveraging the strength of innovation while remaining mindful of the macro landscape.

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Risk Disclaimer

The information provided in this newsletter is for educational and informational purposes only and should not be considered financial advice. Financial markets involve substantial risk, and investments can fluctuate in value, leading to potential losses. Past performance is not indicative of future results. Before making any investment decisions, readers should consider their own risk tolerance and financial situation and consult with a licensed financial advisor if necessary. The strategies and opinions expressed are based on current market conditions and may change without notice.