Weekly market commentary

Market review

This week, the main story in global markets was a major change in US trade policy. The US Supreme Court decided that President Trump could not use the International Emergency Economic Powers Act (IEEPA), which allows emergency economic actions, to introduce large global tariffs. This created immediate uncertainty around future US trade rules.

In response, the White House moved to a backup plan, reinstating a 10% global tariff under Section 122 of the Trade Act of 1974, with the intention of increasing it to 15%. Although the legal approach changed, overall tariff levels are expected to remain similar to those seen in 2025. The rapid shifts have left businesses and trading partners unsure about what comes next. Both the European Union and the UK are considering their options, despite recently agreeing new trade deals with the US. Investors reacted cautiously, and demand for US government bonds, known as US Treasuries, increased as expectations for inflation eased.

Geopolitical tensions also influenced markets. Relations between Iran and the US worsened, raising concerns about potential military action. This pushed Brent crude oil, a key global benchmark for oil prices, to a two-month high and increased demand for precious metals. US and European shares dipped briefly, although overall equity markets remained relatively stable.

In company news, investors focused on Nvidia’s Q4 results. Confidence was supported by reports that China had approved purchases of Nvidia’s H200 computer chips by firms such as Alibaba. These chips are advanced high‑performance processors designed to support Artificial Intelligence (AI) systems. This helped technology shares and contributed to the NASDAQ achieving its first weekly gain in six weeks. Renewed enthusiasm for AI and technology also lifted the “Magnificent Seven,” which delivered their strongest weekly performance since November.

Outlook

Markets remain focused on shifting economic data, with volatility centred on key announcements. Differences in inflation trends and uneven growth are leading central banks to take different approaches, while fiscal pressures and liquidity conditions add challenges. This environment is likely to create differences in performance across assets and regions in the months ahead.

Movers table