Weekly market recap

Your weekly global financial market newsletter

  • Bitcoin broke out of a bearish trend over the weekend, U.S. stocks are in the red for the second consecutive week, and gold posted its first weekly loss in eight weeks.

Indices

U.S. stocks experienced a relatively volatile week and, with the exception of the DJIA, ended in the red despite a significant gain on Friday. The worst performer was the tech-heavy Nasdaq, which suffered primarily due to a sharp decline in Nvidia shares. Following disappointing earnings results on Thursday, Nvidia stock dropped nearly 9%. Other major tech companies also lost ground, contributing to the Nasdaq’s worst monthly performance since September 2023.

The only source of relief for investors came from PCE price data, which aligned with expectations. Annual inflation rates eased slightly, reinforcing market bets on approximately two quarter-point cuts to the Fed funds rate this year.

European equities, meanwhile, were largely unaffected by threats from the U.S. president to impose tariffs on European countries. Strong earnings reports and the prospect of increased defense spending particularly benefited companies in the defense sector. As a result, European indices ended the week in positive territory. The pan-European STOXX Europe 600 rose 0.60%, marking its longest streak of weekly gains since August 2012. Germany’s DAX climbed 1.18%, while France’s CAC 40 fell 0.53%. The UK’s FTSE 100, however, gained 1.74%.

US30
+0.95%
US100
-3.38%
US500
-0.97%
GER30
+1.18%

Commodities

Commodities also underperformed during the week. Oil, following a weak performance, recorded its first losing month since last November, hitting a two-month low on Tuesday after Trump’s foreign policy moves raised concerns and uncertainty about U.S. economic growth and its potential impact on global oil demand. Geopolitical tensions were further heightened by Trump’s failed meeting with Ukrainian President Volodymyr Zelensky.

After eight weeks of gains and record-breaking highs, gold also experienced a more significant decline, losing over 2.5% in value. This was partly due to a stronger dollar, as investors continue to anticipate only two interest rate cuts by the Fed, and partly due to profit-taking after gold prices approached $3,000 per troy ounce. A late-session rebound on Friday, following the failed Trump-Zelensky meeting, did not alter the final outcome.

Gold
-2.63%
Silver
-4.24%
BRENT
-2.18%
NATGAS
-7.14%

Forex

After three weeks of declines and reaching a two-month low, the U.S. dollar rebounded last week, posting gains against all major currencies. Following Donald Trump’s announcement of 25% tariffs on imports from Europe on Wednesday, the dollar saw its biggest gains on Thursday and Friday, despite mixed market data.

Friday’s release of the PCE Price Index, the Fed’s most closely watched inflation indicator, reassured investors that the central bank is unlikely to cut interest rates more than twice this year. Additionally, concerns remain that Trump’s tariffs could have a much greater impact on inflation than initially expected. As a result, inflation fears are reinforcing the stance of those who do not anticipate significant interest rate cuts this year.

EUR/USD
-0.78%
USD/JPY
+0.83%
GBP/USD
-0.44%
USD/CAD
+1.58%

Macro

The annual inflation rate in the Euro Area was confirmed at 2.5% in January, the highest level since July 2024. Core inflation, which excludes volatile food and energy prices, remained unchanged at 2.7% for the fifth consecutive month, marking its lowest level since early 2022. On a monthly basis, consumer prices fell by 0.3% in January, following a 0.4% increase in December.

Germany’s gross domestic product (GDP) contracted by 0.2% in the fourth quarter of last year compared to the previous three months, following 0.1% growth in the third quarter. Year-on-year, the German economy shrank by 0.2%. Meanwhile, annual consumer price inflation in Germany reached 2.8% in February, remaining unchanged from January but exceeding economists’ expectations of 2.7%.

On Tuesday, the Consumer Confidence Index from The Conference Board fell to 98.3, marking the steepest monthly drop since August 2021. In contrast, durable goods orders in the U.S. rose by 3.1% month-over-month in January 2025, the largest increase in six months and well above market expectations of a 2% rise.

The second estimate of fourth-quarter U.S. economic growth confirmed a quarter-on-quarter annualized expansion of 2.3%. For the full year, the U.S. economy grew by 2.8%.

On Friday, the PCE Personal Spending Index for January showed month-over-month growth of 0.3%, matching December’s pace. On an annualized basis, it slowed slightly to 2.5% from 2.6%, marking its first deceleration in four months. The core component of the index, which excludes volatile energy and food prices, increased by 0.3% month-over-month and by 2.6% year-over-year—its lowest level in seven months—down from an upwardly revised 2.9%. All data presented were in line with market expectations.

What to watch out for this week

  • Labor market data will be the most closely watched this week, as recent signals from the U.S. economy suggest a potential cooling that may be more significant than markets currently anticipate. In addition to Friday’s NFP and unemployment rate data, the ADP Employment Change report and Thursday’s Initial Jobless Claims will also be closely monitored.
  • The ECB is set to meet this week, and a widely expected 25-basis-point rate cut is likely. Economic growth remains weak, and inflation is now near target. Moreover, there is a considerable risk that weak demand in the Eurozone could further dampen inflationary pressures, potentially pushing inflation below target over the medium term. Therefore, a rate cut seems justified and is unlikely to be the last one this year. Previous statements from ECB officials suggest that the deposit rate could be lowered to 2.00% or 2.25% by the end of the year. While preliminary data on Monday showed a surprising rise in EU inflation for February, markets still expect a 0.25% rate cut.
  • Additionally, final PMI data for both the manufacturing and services sectors in Europe and the U.S. are expected to confirm moderate growth in manufacturing, alongside a slowdown in services. Toward the end of the week, before the release of key U.S. data, the third estimate of GDP growth in the Euro Area will also be published.

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