Market update: 15 April 2025
Markets went on a wild ride this week as the fallout from “Liberation Day” tariffs continued to ripple through global economies. Early-week panic gave way to a powerful mid-week rebound, after President Trump paused tariffs for 90 days on over 75 countries — excluding China, where tensions have only intensified. With uncertainty still clouding the outlook, investors are navigating a volatile environment, looking for clarity on trade, inflation, and the path forward.
Closer to home, the ASX 200 edged down 0.3%, holding up relatively well amid global swings. Five of the eleven major sectors finished in the red, led by Healthcare, after Trump confirmed pharmaceuticals would not be exempt from tariffs. The RBA held rates steady, with Governor Michele Bullock urging patience as policymakers assess the longer-term impact of global trade tensions. Money markets are now pricing in five RBA cuts this year, up from three just a fortnight ago.
In the US, markets staged a dramatic rebound. The S&P 500 surged 5.7%, notching its best week since November 2023 — including a massive +9.5% jump on Wednesday after Trump’s tariff pause. Still, China was notably excluded from the pause, and the US-China trade war escalated with tariffs reaching 145% and 125%, respectively. Consumer sentiment fell to a three-year low, while inflation expectations jumped to 6.7% for the year ahead, the highest since 1981. The VIX index surged to 38, and bond markets failed to provide their usual safe haven, with 10-year Treasury yields rising nearly 50bps to 4.49%. Despite a softer-than-expected CPI print, markets remain wary of where tariffs and inflation head next. Greater China markets sold off sharply on Monday, with the Hang Seng down 13.2% in a single day, before rebounding later in the week as state-backed equity buying helped steady sentiment. In Europe, markets posted their third straight weekly decline, while Japan’s Nikkei fell 0.6%, recovering from earlier losses on relief from Trump’s partial tariff pause. With high volatility and global uncertainty still in play, we’ll be watching closely as markets continue to adjust in real time.
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