"The year, however, was far from smooth sailing. A combination of worries related to the DeepSeek news in January and the massive tariff hikes announced by Trump on Liberation Day meant global markets in April were down as much as 15-20% from their February high. But this was followed by a swift rebound. Trump backed down from his wilder tariff threats - the infamous TACO trade - and the US economy held up considerably better than expected in the face of the policy turmoil."
"The Magnificent Seven, led by Nvidia, also continued to produce stellar results although later in the year worries emerged of an AI-related bubble. Last and far from least, the US Fed started lowering interest rates again in September. US equities underperformed considerably, particularly in sterling terms with the US returning only 9.1% versus 23.5% for the rest of the world. US performance suffered from the fall in the dollar resulting from the policy chaos in Washington."
2025 saw global equities deliver around 20% returns in local currencies and 14.7% in sterling as the pound strengthened 7.4% against a weak dollar. Markets plunged 15–20% in April after DeepSeek news and large tariff hikes but quickly rebounded when tariff threats eased and the US economy remained resilient. The Magnificent Seven, led by Nvidia, produced strong results while raising AI bubble concerns. The US Fed began cutting rates in September. US equities lagged, while UK, Europe, and Emerging Markets outperformed. Fixed income returns varied across regions, with Treasuries and gilts positive.
Read at London Business News | Londonlovesbusiness.com
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