Market Updates

Rising global trade tensions and extreme policy uncertainty have sparked a broad risk asset selloff, prompting a three-month tactical shift to reduce equity exposure and increase allocation to short-term U.S. Treasuries as a defensive move.

Markets face renewed volatility amid escalating trade tensions and reciprocal tariffs, with central bank commentary, inflation data, and major earnings in focus this week—while last week’s resilient U.S. jobs report was overshadowed by Trump’s tariff shock and its inflationary implications.

U.S. policy shifts are driving global uncertainty, prompting responses from Europe and Canada, but AI investment and potential deregulation could support economic growth, reinforcing BlackRock’s overweight stance on U.S. stocks over the next 6–12 months.

Markets focus on Trump’s global tariffs, Powell’s speech, and the US jobs report this week, while inflation readings from Germany and Italy, China’s PMI data, and the ECB’s policy signals will also be closely watched amid ongoing stagflation fears and tariff-driven market volatility.

Despite a U.S. equity pullback, BlackRock remain overweight U.S. stocks while seeing global opportunities, with Europe’s fiscal boost, Japan’s corporate reforms, and Latin America’s mega forces driving gains, though prolonged U.S. policy uncertainty could pose risks.

Markets focus on global PMI data, central bank speeches, and key economic releases this week, while last week’s central bank decisions saw the Fed, BoJ, and BoE hold rates amid trade uncertainties. Mixed U.S. data and China’s policy signals added to market volatility, with bond yields rising and oil prices climbing.

Despite market doubts about U.S. growth and tech, BlackRock see no recession signs and expect policy uncertainty to ease, keeping them overweight U.S. stocks, while long-term bonds remain unreliable diversifiers amid persistent deficits and inflation.

A busy week for central banks, with rate decisions from the Fed, BoJ, and BoE, alongside key economic data and earnings reports, while markets react to inflation data, economic concerns, and shifting policy expectations across the U.S., UK, and China.

Major policy shifts, including Germany’s fiscal boost and U.S. tariffs, create near-term risks, but BlackRock see AI-driven growth offsetting pressures from inflation and rising debt, keeping them positive on stocks over the next 6–12 months.

This week features a light economic data calendar alongside a Fed blackout period, with key events including Japan’s GDP, US CPI, and eurozone inflation, while US lawmakers face a critical deadline to avert a government shutdown. Last week, weaker-than-expected US data fueled stagflation concerns, leading to market volatility, a decline in the dollar, and a drop in equities, while China’s policymakers signaled targeted stimulus amid ongoing disinflationary pressures.