Global Markets Show Divergent Trends as Investors Navigate Earnings and Economic Headwinds
U.S. Market Snapshot – Uneven Performance Amid Earnings and Trade Concerns
Equity markets delivered a mixed performance on Thursday. The S&P 500 and Russell 2000 posted modest gains, whereas the Dow Jones Industrial Average and Nasdaq Composite closed slightly lower. A significant 22% decline in UnitedHealth Group shares weighed heavily on the Dow after the company reported weaker-than-expected Q1 earnings and reduced its 2025 guidance.
The Nasdaq also dipped as Nvidia faced price target reductions from brokerages, pressuring the tech sector. In contrast, the S&P 500 found support from energy and consumer staples, while healthcare and technology lagged.
Bond yields edged higher, with the 10-year Treasury yield climbing to 4.33%. This occurred despite March housing starts falling short of expectations and Mid-Atlantic manufacturing activity showing signs of contraction.
For the shortened holiday week, the Dow and Nasdaq both fell around 2.6%, while the S&P 500 declined by 1.5%.
Investor Sentiment Remains Cautious Despite Strong Earnings from Key Stocks
Investors remained guarded as markets processed trade negotiations and interest rate concerns. The S&P 500 managed a slight 0.1% gain, bolstered by strong performances from Eli Lilly and Apple, while the Dow Jones fell by 527 points.
President Trump’s remarks on trade progress with Japan and his push for a deal with China added to the uncertainty. His renewed criticism of Federal Reserve Chair Jerome Powell and calls for rate cuts further unsettled markets.
Although weekly jobless claims declined—suggesting a resilient labour market—investor sentiment was mixed as tariff direction and monetary policy remained in focus.
Global Economic and Market Update
Asia-Pacific Equities Mixed Post-Holiday
Asian markets opened the week with mixed movements. China’s CSI 300 rose 0.15% after the central bank maintained interest rates, while Japan’s Nikkei 225 fell 1.33% and South Korea’s Kospi edged down 0.16%.
India’s markets performed positively, with the Nifty 50 rising 0.56% and the Sensex climbing 0.73%. Markets in Australia and Hong Kong were closed for the Easter holiday.
U.S. Equity Futures Slide on Trade Tensions and Earnings Outlook
U.S. equity futures fell overnight following the holiday weekend. Market sentiment was impacted by continued trade concerns, particularly due to the absence of direct U.S.-China negotiations.
Chicago Fed President Austan Goolsbee warned of a potential economic slowdown due to tariffs. Investors are also bracing for a critical earnings week featuring reports from Tesla, Alphabet, and Boeing.
ECB Rate Cuts and European Market Trends
In Europe, equities dipped after the European Central Bank (ECB) announced its seventh rate cut in a year in an effort to stimulate a weakening economy amidst trade uncertainties.
While shares in Hermès and LVMH declined on earnings disappointments, the STOXX 600 managed a 4% weekly gain, buoyed by gains in energy shares following rising crude oil prices.
Dollar Weakness Reflects Trade and Fed Independence Concerns
The U.S. dollar index fell to a three-year low of approximately 98.6 on Monday. Market concerns over the Federal Reserve’s independence and increasing trade tensions under the Trump administration weighed heavily on the greenback. The EUR/USD exchange rate rose to 1.1518, showing a marked dollar decline against the euro.
Oil Prices Drop on Diplomatic Progress
Oil markets saw prices fall by nearly 2% due to developments easing global supply concerns:
- U.S.-Iran nuclear talks made progress.
- A temporary ceasefire between Russia and Ukraine helped lower the risk premium.
As a result, Brent crude fell to $66.76 per barrel, and WTI dropped to $62.82. Both had risen by over 3% on Thursday before the holiday weekend.
Equities on the Move – Company Highlights
Notable Gainers and Decliners
Netflix beat expectations with Q1 revenue exceeding $10.5 billion and a 3.5% share price increase after hours. The company now has over 300 million global subscribers, with strong adoption of its lower-priced, ad-supported tier.
UnitedHealth Group shares plunged over 20%, the biggest drop since 2008, due to high medical costs and issues within its Optum division.
L’Oréal posted a 3.5% Q1 sales increase, with strong demand in Europe and China, although U.S. sales were weaker due to soft makeup demand.
Hermès will increase U.S. prices starting May 1 to offset tariff impacts. Despite missing Q1 expectations, it performed better than peers.
American Express reported a 6% profit rise to $2.58 billion, with revenue up 8% to $16.97 billion. Shares, however, are down 8% since April’s tariff announcements.
State Street delivered a 39% profit increase, driven by cost-cutting and higher client fees. Assets under custody rose 6% to $46.7 trillion. However, analysts expect a larger impact on fee income in Q2, and shares have declined 19% year-to-date.
Tesla delayed production of its affordable Model Y variant to late 2023 or early 2024, aiming for 250,000 U.S. units by 2026.
Eli Lilly shares soared over 14% after Phase 3 trials of its diabetes pill orforglipron showed similar results to Ozempic, with up to 16 pounds of weight loss.
Uber is in acquisition talks with Turkish delivery platform Trendyol Go, owned by Alibaba-backed Trendyol Group.
Ford paused shipments of SUVs, pickups, and sports cars to China due to retaliatory tariffs of up to 150%. Exports of engines and transmissions will continue, however.
Bill Ackman’s Pershing Square acquired a 20% stake in Hertz, with a proposed Uber partnership and a $30 per share valuation by 2029.
Novo Nordisk was downgraded by BMO Capital Markets to “Market Perform”, citing pressure from Eli Lilly’s orforglipron and ongoing semaglutide supply issues.
Bank of America lowered TSMC’s price target, cutting 2026–2027 earnings estimates by ~5% due to tariff-related demand uncertainty, while maintaining a Buy rating.
Citi upgraded Schneider Electric to “Buy”, with a trimmed price target of €245 and positive outlook based on data centre demand.
What’s Next – Key Events to Watch
Markets are expected to stay volatile as tariff policy uncertainty lingers. Investors will monitor:
- Earnings reports from Alphabet, Tesla, Boeing, and SAP
- Economic data including flash PMIs, U.S. durable goods orders, and home sales
- The PBoC’s loan prime rate decision, which is expected to remain unchanged
For more information visit https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice.
