Market Update: March 31, 2025
Economic data included a slight upgrade to U.S. GDP for Q4, and positive news for durable goods orders and a variety of real estate sales and price data. However, consumer sentiment took another dip downward, due to high uncertainty about trade policy.
Equities fell around the world, with concern about upcoming trade policy and weakening consumer sentiment. Bonds were flattish with sticky inflation offsetting a usual risk-off response. Commodities were mixed, with energy prices a bit higher.
U.S. stocks began Monday positively, up nearly 2% upon hints that the President may back off the more extreme tariff measures on April 2, now only days away. However, by Wed., potential new tariffs on non-U.S. autos and auto parts soured the mood again, as did weakened consumer confidence as the result of policy uncertainty. Last week proved to be just another example of how closely financial markets are reacting to trade news above all else at this point, with some well-known firms issuing continued revisions upward for expected net tariff rates. By sector, stocks saw gains in more defensive consumer staples as well as energy, while technology and communications saw the sharpest declines. Real estate earned a small gain for the week.
Foreign stocks fell to a similar degree as U.S. stocks, with only the U.K. showing a minor gain, while Japan fared a bit worse than Europe. Concerns were largely as in the U.S.—the potential impact of the upcoming tariff deadline this coming week and still-clear implications on foreign trade changes in a variety of industries, including autos. However, as seen in the MSCI EAFE performance year-to-date, there have been rising signs of a more positive shift in sentiment for international stocks. This has come with moves toward more deficit spending that could act as a catalyst for economic growth, which has been sorely lacking in recent years, and explained foreign stock sub-par valuations to some degree.
Bonds were mixed for the week, with U.S. government outperforming corporate as spreads widened slightly. High yield lost a bit of ground, while floating rate gained. Foreign developed market bonds earned small gains, while emerging markets lost ground as investors inched away from risk.
Commodities were mixed, with gains in precious metals and energy, offset by declines in industrial metals and agriculture. Crude oil rose over a percent last week to $69/barrel, with prices remaining within a trading range and a balance of supply and demand factors generally.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.