EN 
ZH 
ID 
ES 
FR 
JP 
Despite persistent uncertainties clouding the global economy, several markets found reasons to rally this past week. Let’s take a closer look at the forces shaping major economies—from strong job gains in the U.S. to policy holds in emerging markets.
United States
Stocks Surge on Trade Optimism and Solid Earnings
Wall Street had a winning week, with the S&P 500 Index posting back-to-back weekly gains for the first time since January. The Nasdaq jumped 3.42%, riding a wave of upbeat tech earnings. Meanwhile, small- and mid-cap stocks rose for a fourth straight week, reflecting broader market strength.
Markets kicked off the week on a high note, buoyed by easing trade tensions. President Trump softened his stance on tariffs targeting autos, while Commerce Secretary Howard Lutnick hinted a significant trade deal was imminent. Midweek, attention shifted toward corporate earnings, with major firms—including members of the “Magnificent Seven”—delivering reports. Although many noted uncertainty in their forward guidance, investors seemed undeterred, betting on resilience amid sluggish growth and tariff headwinds.
Labor Market: Mixed Signals but Positive Surprises
Economic data painted a mixed picture. Job openings in March slipped to 7.2 million—the lowest since September—raising concerns about softening demand for workers. ADP’s report showed a sharp slowdown in private hiring, with just 62,000 new jobs in April.
Yet, the official BLS payrolls report on Friday turned the narrative around. Employers added 177,000 jobs—above expectations. The unemployment rate held at 4.2%, and wages inched up 0.2% month-over-month. Markets responded positively, pushing stocks higher into the weekend.
Economic Contraction Returns
The BEA revealed that Q1 GDP shrank by 0.3%, marking the first economic contraction in three years. A surge in imports—likely a preemptive move before tariffs—combined with weaker consumer and government spending contributed to the decline.
However, consumer spending was still up 0.7% in March, and the Fed’s favored inflation gauge—the PCE Price Index—remained flat, hinting at subdued inflationary pressures despite fiscal turbulence.
Treasury Yields React to Job Numbers
Yields wobbled throughout the week but climbed on Friday following the strong jobs data. Municipal bonds gained ground thanks to seasonal trends, while corporate debt lagged. The high-yield bond segment found support from positive fund flows and limited issuance, though energy bonds slipped amid Saudi Arabia’s hints at ramping up oil production.
Weekly Performance Snapshot:
| Index | Friday’s Close | Week’s Change | % Change YTD |
| DJIA | 41,317.43 | 1,203.93 | -2.88% |
| S&P 500 | 5,686.67 | 161.46 | -3.31% |
| Nasdaq Composite | 17,977.73 | 594.79 | -6.90% |
| S&P MidCap 400 | 2,932.01 | 100.34 | -6.05% |
| Russell 2000 | 2,020.74 | 63.12 | -9.39% |
Europe
Markets Rally as Trade Concerns Ease
The STOXX Europe 600 rose 3.44%, and major indexes followed suit. Germany’s DAX (+4.63%), Italy’s FTSE MIB (+4.13%), France’s CAC 40 (+3.57%), and the UK’s FTSE 100 (+2.15%) all gained ground
Eurozone GDP Growth Accelerates
Q1 GDP in the eurozone doubled to 0.4%, beating expectations. Spain and Italy outperformed, while Germany and France eked out modest gains. Ireland saw a 3.2% boost, skewed by multinational activity.
Inflation and Sentiment Show Contrasts
Inflation held at 2.2% year-over-year, with core inflation rising slightly. But economic sentiment dropped—the EU confidence index slid to a December low of 93.6, and consumer sentiment stayed in negative territory.
UK Property and Business Outlook Weakens
UK house prices dipped 0.6% in April as post-tax discount demand faded. Mortgage approvals fell for a third straight month. Business confidence also dropped, with Lloyds Bank’s barometer falling to 39%, a four-month low.
Japan
Equities Gain Despite Soft Domestic Data
The Nikkei 225 rose 3.15%, and the TOPIX added 2.27%. A stable interest rate and delayed policy tightening by the Bank of Japan (BoJ) boosted investor morale.
BoJ Holds Steady, Cites Downside Risks
The BoJ kept its rate at 0.50% and downgraded growth and inflation forecasts, citing global uncertainty and weak domestic indicators. Inflation is unlikely to hit the 2% target soon, but wage dynamics may support gradual normalization.
Economic Indicators Miss Expectations
PMI data showed continued manufacturing weakness. Industrial production and retail sales for March also disappointed.
China
Mainland Stocks Dip; Hong Kong Rallies
CSI 300 (-0.43%) and Shanghai Composite (-0.49%) slipped in a shortened trading week. The Hang Seng, however, climbed 2.38%.
Trade Tensions Could Be Thawing
Beijing signaled willingness to restart trade talks with the U.S. after exemptions were made on $40 billion in U.S. imports. A possible breakthrough may be brewing.
PMI Falls; Economic Target in Doubt
Manufacturing PMI sank to 49, its lowest since late 2023. Non-manufacturing PMI also fell slightly. With a 5% annual growth target under pressure, analysts expect targeted stimulus as conditions evolve.
Other Markets
Hungary: Rates Unchanged, Inflation Risks Rise
Hungary’s central bank held its base rate at 6.50% amid heightened global uncertainty. Inflation was 4.7% in March, and policymakers warned that new tariffs and risk aversion could weigh on future growth and the forint.
Chile: No Rate Change Amid Inflation Concerns
Chile also held its benchmark rate at 5%. Policymakers see improved local conditions, but inflation is expected to stay high in the short term. Export sector strength is providing some support.
———
Data sources: Reuters, Bloomberg, Yahoo Finance.
