Global markets face turmoil; U.S. equities decline sharply

The first quarter of 2025 has been rocky for global markets, with fears of a trade war escalating. Investors are increasingly nervous after U.S. President Donald Trump returned to the White House, prompting many to pull out of Wall Street. Emerging markets are struggling with various domestic crises. The UK’s financial landscape is also under pressure as the effects of Trump’s tariffs have begun to show in global economic data. U.S. equities are experiencing significant losses, while European stocks are performing notably better. The European index, STOXX 600, is expected to rise by 9.3%, marking a strong start compared to the S&P’s 4.5% decline. Investors are shifting their focus from U.S. stocks, finding real alternatives in Europe and Asia. Several emerging economies, including Turkey, Indonesia, and Colombia, are facing difficulties. In Turkey, political tensions have led to a rapid decline in the lira and stock prices, prompting a central bank response. Indonesia's economic concerns have also affected its currency and stock market, while Colombia is dealing with political instability as its finance minister resigned. In the U.S., upcoming economic data will shed light on inflation trends. A key inflation measure, the personal consumption expenditures price index, will be released soon. The Federal Reserve has raised its inflation forecast, which may delay interest rate cuts. In the UK, investors await a critical budget statement as the Labour government deals with sluggish growth and high borrowing. Forecasts for government spending are likely to be downgraded, forcing difficult choices on taxes and spending. Meanwhile, Australia and Japan will release inflation reports soon. Australia is expected to see stable consumer prices, while Japan's central bank is closely watching domestic price pressures amid uncertainty from U.S. tariff impacts.