US Equities Surge on Tariff Pause Announcement
US equities posted strong gains across the board after President Trump announced a 90-day pause on new tariff hikes for most countries. China was the exception, with tariffs raised to 125%. The move eased fears of escalating trade tensions and sparked a relief rally, lifting investor sentiment.
Tariffs were reduced to a baseline of 10%, which reduced some of the uncertainty affecting markets and introduced the prospect of a more predictable trade environment. Technology stocks were particularly strong performers, with the Nasdaq jumping over 12%, marking its biggest gain since 2001.
Fed Minutes Highlight Inflation and Growth Concerns
The Federal Reserve’s meeting minutes from the previous month revealed widespread concern among policymakers about the risks of higher inflation and slower economic growth. While the committee was largely unified in its assessment of economic risks, it also showed potential flexibility to adjust policy based on conditions.
Markets remain sensitive to inflation data, with the consumer price index (CPI) expected to provide further guidance on the Fed’s potential actions. Despite recent volatility, the VIX index spiked above 50 earlier in the week, indicating continued investor uncertainty. However, historical data suggests that such high volatility levels often precede positive market performance over the following year.
Investment Strategy Amid Market Stabilisation
As the market shows signs of stabilising, the focus remains on diversification and long-term investment strategies. Despite recent volatility, bear markets are typically followed by longer bull-market periods. Equities may already reflect much of the negative news for the year, and if a recession does not occur, a significant recovery is possible.
Investors are advised to maintain diversified portfolios and avoid attempts to time the market, a strategy that has consistently outperformed short-term predictions.
Latest Market and Economic Update
Asian Equities Rally
Asian equities climbed on Thursday, mirroring Wall Street’s strength. Japan’s Nikkei and South Korea’s KOSPI led the recovery. Chinese markets also posted gains despite rising trade tensions, supported by state-backed investments. Economic data showed that China’s consumer inflation fell more than expected in March, reflecting weaker domestic demand. Producer prices also dropped, indicating continued economic pressure.
US Futures and Market Focus
US equity futures edged higher overnight as investors digested the 90-day tariff pause announced by President Trump. Markets are closely watching the broader economic landscape, particularly the impact of trade relations with China and upcoming inflation data, which may influence the global growth outlook.
European Equities Decline
European stocks dropped sharply on Wednesday due to growing trade tensions. The STOXX 50 fell by 3.1% and the STOXX 600 declined 3.7%. The losses followed China’s move to raise tariffs on U.S. goods to 84%, as well as President Trump’s statements on additional potential tariffs. The European Commission also approved retaliatory tariffs on US products, adding to market uncertainty.
Currency and Commodity Movements
The US dollar index remained steady around 102.8 on Thursday, following a rebound in the previous session. Support came from the 90-day tariff suspension for countries that didn’t retaliate. The euro traded at 1.0982 against the dollar, with attention fixed on upcoming inflation figures and how they might shape Federal Reserve policy.
Oil prices moved lower on Thursday, with Brent crude falling 1.18% to $64.71 per barrel. While temporary supply disruptions, such as the Keystone Pipeline shutdown, offered some support, concerns about global economic growth and China’s outlook weighed on demand expectations.
Equities on the Move
Corporate Developments Impacting Stock Prices
Delta Air Lines
Delta withdrew its 2025 financial forecast and projected lower-than-expected profits for the current quarter, citing reduced travel demand and economic uncertainty from U.S. tariffs. The company plans to defer aircraft deliveries and cut capacity, moves that reassured investors despite broader concerns.
Walmart
Walmart maintained its “everyday low price” strategy and stuck to its full-year sales and income growth forecasts, despite tariff-driven price pressures. The company noted the impact of tariff uncertainty on Q1 income but saw its shares rise following the 90-day pause announcement. Management remained confident in navigating the challenges.
Volkswagen
Volkswagen reported Q1 operating results of €2.8 billion, down from €4.6 billion a year earlier. The decline was attributed to US tariff impacts, diesel issue provisions, and costs related to carbon regulations and software unit restructuring. Still, the company reaffirmed a full-year sales growth forecast of up to 5%, excluding potential future tariff effects.
Amazon
Amazon is considering a $15 billion expansion plan involving around 80 new logistics facilities across U.S. urban and rural areas. The focus includes delivery hubs and some automated fulfillment centers. The company also cancelled orders for several products sourced from China and Asia due to the new tariffs, causing concern among suppliers.
Alphabet
Alphabet confirmed a $75 billion investment for 2025 aimed at boosting data center capacity and supporting AI development, including the Gemini model. The company remains focused on enhancing its core services like Search and expanding AI for both consumer and business users, despite potential cost increases from global trade disruptions.
Capri Holdings & Prada
Capri Holdings is reportedly in $1.4 billion talks with Prada for a possible acquisition of Versace. The deal, which could be announced soon, is still awaiting final approval from the Versace family. Market volatility and tariff concerns continue to challenge the luxury retail sector.
Analyst Actions and Ratings
Tesla
Benchmark added Tesla to its “Best Ideas” list, calling the recent equity pullback and sales weakness overdone. Though the firm lowered its price target to $350, it remains bullish on Tesla’s vehicle and robotaxi launches and long-term robotics ambitions. Risks cited include political pressure and increased competition.
Apple
Bank of America analysts estimated that shifting iPhone production to the U.S. could raise costs by up to 25%, or even 90% if tariffs hit imported parts. Apple is exploring India as a production alternative, but no immediate changes are expected.
Visa, Mastercard, PayPal
Evercore ISI initiated coverage with In-line ratings for Visa, Mastercard, and PayPal. The firms are viewed as defensive plays in a volatile environment, though concerns remain about valuation and execution. Mastercard is preferred for valuation, while PayPal’s turnaround depends on successful strategy execution.
Fiserv
Monness, Crespi, Hardt downgraded Fiserv to Sell from Neutral, citing valuation concerns, especially in its Clover POS unit, amid weakening consumer and discretionary trends. The price target was set at $145, reflecting downside risks in a slowing macro environment.
Samsung
BofA Securities upgraded Samsung Electronics to Buy from Neutral and raised its price target, citing stronger-than-expected earnings, low valuation, and reduced tariff concerns. Growth is expected from memory price recovery, smartphone cost cuts, and DRAM/HBM3e demand, with potential market share gains in Europe and emerging markets.
European Luxury Sector
Deutsche Bank downgraded several European luxury stocks due to concerns about sustained demand and weaker macro conditions. Richemont, Kering, and LVMH saw target price cuts. However, Hermès was upgraded to Buy for its resilience, and Burberry was named a top pick.
Vinci
Bernstein identified Vinci as a Q2 2025 top pick, giving it an Outperform rating and a target price of €146.7. The analysts cited Vinci’s market position, rising earnings, and strong cash flows, noting that the current valuation undervalues its assets, especially in toll roads and contracting.
Upcoming Data and Events
Key data and events expected to influence markets:
- Consumer Price Index (CPI)
- Initial Jobless Claims
- Speeches from Federal Reserve officials
- Earnings reports from CarMax and Tesco
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