US markets closed the week in red after economic data pointed to slowing business activity and further weakening in consumer sentiment. Adding to the gloom was weak guidance shared by Walmart, which is considered a proxy for the health of the US consumer. Musk’s DOGE continued its aggressive firing spree as the US announced plans to slash its defence budget.
The geopolitical situation also remained murky and unsettled in Europe, pointing to a complicated path towards fiscal stimulus.
Markets fluctuated amid U.S. inflation data and the ongoing tariff policy uncertainty. Bonds saw heightened intraweek volatility. Chinese stocks rose on AI optimism and an Alibaba-Apple partnership, contrasting with India’s slump from foreign outflows and valuation concerns.
Last week saw several US economic data releases and earnings releases from major players. However, these events were overshadowed by Trump’s announcements which ranged from tariffs on 3 of their biggest import origin countries, a last-minute course reversal on 2 of them, suggesting a takeover of the Gaza strip, and ending the week with an indication of more upcoming tariff announcements. India announced a rate cut after almost 5 years, gold hit record highs and oil fell as markets fear receding global trade.
US stocks bounced back after the shock from the DeepSeek news early in the week, driven by strong Q4 earnings, particularly from tech stocks. Three of the world’s leading Central Banks announced interest rate decisions. In India, the government announced its budget for the next year, which has several growth-oriented initiatives and was received well by markets.
However, most of the news flow from financial markets over the near future is likely to be drowned out by the uncertainty around the imposition of tariffs announced by the Trump administration and the consequences of the same.
