Markets Volatile Amidst Corporate Earnings and Trade Policies Announcements

In the week gone by, the global stock markets navigated volatility driven by mixed corporate earnings, evolving trade policy developments, and Federal Reserve expectations. Recently, market resilience suggested investors find opportunities amid the volatility. In this blog, we’ll know in detail what happened last week (April 28, 2025 to May 2, 2025) all across the globe.

Global Tech Giants Posted Great Results

Tech giants like Microsoft and Meta Platforms posted impressive results, though cautious guidance reflected concerns, with some consumer companies flagging spending slowdowns due to tariff uncertainties.

U.S. economic data showed Q1 2025 GDP contracting 0.3%, jobless claims rising to 241,000, Manufacturing PMI at 50.7, and durable goods orders jumping 9.2%. Bond markets anticipate three Fed rate cuts in 2025, likely starting mid-year, with no cut expected next week.

Trade Negotiations on the Way

Investors are hopeful for further de-escalation in the tariff war, particularly with China, as evidenced by market gains following reports of potential negotiations. However, uncertainty persists, as tariffs on Chinese goods remain at elevated levels, and retaliatory measures from China and other nations loom.

In Europe, Eurozone PMI dipped to 50.1 in April from 50.9, with weaker services but stronger manufacturing. The IMF cut its 2025 growth forecast to 0.8% from 1% due to tariff concerns, yet ECB assurances of no recession and expected 2025 rate cuts bolstered sentiment.

Japan’s economy, forecast to grow 0.6%, gained from a stronger yen and 0.7% export growth to China. In China, despite 5.4% Q1 GDP growth, weak domestic demand, property sector woes, and high tariffs clouded confidence, even with stimulus efforts.

Indian Market Experienced Volatility

Back at home, the stock market experienced a volatile week with resilience, supported by banking and IT sector gains despite geopolitical tensions and profit-taking. The hopes of easing U.S.-China trade tensions also supported the market. Foreign Institutional Investors (FIIs) have been supportive this week, with reduced selling intensity.

The recent announcement of 12% safeguard duty on steel product imports for the next 200 days reinforces India’s domestic growth narrative, which could sustain FIl interest, provided global cues remain favourable.

Tensions between India and Pakistan, following a terrorist attack in Kashmir, weighed on sentiment, leading to a sell-off mid-week. The Indian stock market is expected to remain volatile next week, influenced by global cues, corporate earnings, and macroeconomic data. Strong earnings from the banking and IT sectors could sustain momentum.

Future Outlook

The ongoing India-Pakistan tensions may continue to impact sentiment, potentially triggering short-term volatility. The Federal Reserve’s May 6-7 meeting could influence global markets, with a 67% probability of a 25-basis-point rate cut in June, though expectations for May remain low at 11%.

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Reference:
SMC Global Securities’ Research Team

Author: All Content is verified by SMC Global Securities.