Global Markets Weekly Update 

U.S.

Major U.S. stock indexes finished the volatile, holiday-shortened week higher amid tentative signs of de-escalating conflict in the Middle East (markets were closed Friday in observance of the Good Friday holiday). The Nasdaq Composite led indexes higher, logging its best week since November, while the S&P 500 Index and Dow Jones Industrial Average advanced 3.36% and 2.96%, respectively. Smaller-cap indexes also posted solid gains.

After mostly declining on Monday, equities rallied sharply on Tuesday and Wednesday as U.S. President Donald Trump suggested a growing willingness to wind down U.S. military involvement in Iran. However, sentiment weakened again after a Wednesday night address from Trump that failed to provide a clear timeline for de-escalation, pushing oil prices higher and weighing on equities early Thursday, though indexes largely recovered by the end of the day, locking in positive returns for the week.

U.S. Treasuries also advanced as yields generally ended lower than the prior week, with the yield on the benchmark 10-year U.S. Treasury note declining from 4.44% to around 4.31% by Thursday afternoon. (Bond prices and yields move in opposite directions.) In addition to geopolitical headlines, comments from Federal Reserve Chair Jerome Powell that helped ease some recent inflation concerns also appeared to support fixed income markets during the week.

Employment data mixed

In labor market news, private payroll processing firm ADP reported that private employers added 62,000 jobs in March, down slightly from February’s revised gain of 66,000 but ahead of estimates for an increase of around 40,000. Jobless claims for the week ended March 28 also came in better than expected, decreasing by 9,000 to 202,000, below estimates for around 212,000. However, continuing claims for the week ended March 21 rose to 1.841 million, up 25,000 from the prior week.

Meanwhile, data from the Bureau of Labor Statistics showed that job openings—an indicator of demand for labor—declined month over month in February to 6.9 million from 7.2 million in January, while hiring slid to the lowest level since 2020.

Consumer confidence and manufacturing activity see modest improvements

Elsewhere, consumer confidence edged higher in March despite rising costs related to tariffs and escalating conflict in the Middle East. The Conference Board reported that its Consumer Confidence Index rose 0.8 points to 91.8 as consumers’ improving views of current conditions outweighed a more pessimistic outlook for future expectations. March was the second month in a row of improving confidence, though the report also noted that the index has generally been in a downward trend since 2021.

U.S. manufacturing activity expanded for the third consecutive month in March, according to data from the Institute for Supply Management. The institute’s Manufacturing Purchasing Managers’ Index (PMI) rose 0.3 percentage points to 52.7, ahead of estimates for a modest month-over-month decline, supported by growth in new orders and production (readings above 50 indicate expanding activity). However, employment contracted for the 30th consecutive month, while price pressures rose to the highest level since June 2022.

Europe

The pan-European STOXX Europe 600 Index ended the week up 3.92% in local currency terms. Sentiment across the region improved on hopes that the conflict in the Middle East may be shorter-lived than originally feared. Among major stock indexes, Germany’s DAX added 3.89%, Italy’s FTSE MIB rose 5.18%, and France’s CAC 40 Index climbed 3.48%. The UK’s FTSE 100 Index gained 4.70%. The region’s stock markets were closed for Good Friday.

Energy shock feeds through to inflation

The annual rate of inflation in the eurozone rose to 2.5% in March, up from 1.9% the previous month. This was the highest rate since January 2025 and was driven by energy costs soaring 4.9%. In contrast, inflation slowed in services; non-energy industrial goods; and food, alcohol, and tobacco.

German gross domestic product forecast revised downward

A group of Germany's leading economic institutes, including the Ifo Institute, revised down its joint forecast for the country’s economic growth, citing the energy shock caused by the war in the Middle East. The 2026 forecast was lowered from 1.3% to 0.6%.

Spanish manufacturing falls

Manufacturing activity contracted in Spain in March, with the S&P Global Spain Manufacturing PMI falling to a reading of 48.7, well below market expectations of around 50.4 and a decline from 50.0 in February.

Activity in Sweden picks up

Manufacturing showed signs of improvement in Sweden in March, with the Swedbank Manufacturing PMI rising to 56.3, supported by higher employment and inventory purchases. This was the highest level since March 2022. Companies’ production plans for the next six months stayed high at 67.8, reflecting sustained optimism. 

Swiss retail sales growth remains in positive territory

Retail sales in Switzerland rose by 0.9% in real terms in February compared with the same month last year, according to the country’s Federal Statistical Office. Within this, nonfood sector sales rose by 2.8%, while retail sales of food, drinks, and tobacco fell by 1.1% year on year.

Manufacturing PMI revised lower in UK 

The S&P Global UK Manufacturing PMI was revised down to 51.0 in March from the preliminary estimate of 51.4 and lower than the level of 51.7 in February. Manufacturing output decreased for the first time in six months; however, new orders and suppliers’ delivery times remained on an improving trend.

House price growth in the country showed signs of accelerating in March, according to the UK Nationwide House Price Index. The monthly index rose 2.2% year on year, up from 1.0% growth in February.

Japan

Japan’s stock markets fell during the week through Thursday, with the Nikkei 225 Index declining 1.7% and the broader TOPIX Index down 1.0%. After rallying on Wednesday on hopes of a de-escalation in geopolitical tensions, the markets fell sharply on Thursday when the U.S. administration dashed hopes of a firm deadline for ending the war in Iran, with President Trump threatening to escalate attacks on the country over the next two to three weeks. Investors also received no reassurance about progress toward ensuring that shipping through the Strait of Hormuz would return to normal. The price of Brent crude jumped following Trump’s comments. With Japan’s economy highly vulnerable to oil price spikes, given its heavy reliance on oil from the Middle East, this weighed further on sentiment.

Amid the geopolitical and energy market turmoil, many investors converged around the view that the Bank of Japan (BoJ) could raise interest rates at its April meeting, in part due to growing concerns about rising inflation from higher oil prices. BoJ Governor Kazuo Ueda said that the central bank will closely watch moves in the yen as they affect the economy and prices. The yield on the 10-year Japanese government bond rose to 2.39% from 2.34% at the end of the previous week.

The yen strengthened to around JPY 159.3 against the U.S. dollar, from 160.3 at the end of the prior week. The Japanese currency appreciated following comments by the country’s top currency diplomat, Atsushi Mimura, who asserted that it may be time to take decisive measures, given an increase in speculative moves in the currency market and the crude futures market. Markets have increasingly been positioning around a potential currency intervention by Japanese authorities to prop up the historically weak yen.

Inflation gauge comes in cooler than expected

In the week’s economic data releases, the Tokyo-area core consumer price index, a leading indicator of nationwide trends, rose 1.7% year over year in March. Economists had expected the pace to hold at 1.8%. The cooling was partially due to continued slowing in gains in food costs. Separate February data showed that industrial production was in line while retail sales missed expectations. Industrial production fell 2.1% month over month, matching consensus forecasts, with autos, metal products, and electronic parts and devices the main drags. Retail sales fell 2.0% month over month, more than the 0.9% decrease anticipated by the consensus forecast and down from a 3.0% increase in January.

China

Mainland Chinese stock markets were mixed for the week through Thursday as markets balanced improving domestic activity signals against persistent external risks. The onshore benchmark CSI 300 Index slipped 0.53%, and the Shanghai Composite Index edged up 0.14% in local currency terms, according to FactSet. In Hong Kong, the benchmark Hang Seng Index gained 0.66%. China’s mainland markets will open on Friday but close on Monday for the Qingming Festival, a traditional Chinese holiday when families honor their ancestors. Hong Kong markets will be shut from Friday through Tuesday for a combination of Easter and local public holidays.

China PMI rebound broad-based across official and private surveys

China’s March PMI data showed improvement across both official and private sector gauges. The official Manufacturing PMI rose to 50.4 in March, its fastest rate in a year, exceeding market expectations and following two months of contraction. The nonmanufacturing PMI, which measures activity in the services sector, rose to 50.1 from 49.5 in February. Meanwhile, the RatingDog China General Manufacturing PMI, compiled by S&P Global, expanded for a fourth straight month to 50.8 in March. The breadth of the rebound suggests firmer momentum across both state-linked industrial firms and smaller, export-oriented private companies, supporting a near-term stabilization narrative. However, both surveys pointed to rising input costs, indicating the recovery is uneven and increasingly cost-driven, with margin pressure emerging as a key risk.

China, Pakistan call for ceasefire of U.S.-Israeli war on Iran

China and Pakistan jointly proposed a five-point peace plan aimed at de-escalating the Middle East conflict, calling for an immediate ceasefire, renewed negotiations, and protection of critical shipping routes, especially the Strait of Hormuz. The initiative was announced after talks between Foreign Minister Wang Yi and Pakistan’s Ishaq Dar in Beijing. Both countries called for the protection of civilians and critical infrastructure, including energy facilities, power systems, desalination plants, and nuclear installations. They emphasized the importance of the United Nations and multilateral cooperation in advancing a lasting peace framework. 

China removes export tax rebates on key clean energy products 

China began implementing the removal of the value-added tax export rebates on a wide range of products, including solar components, batteries, and industrial materials, effective April 1. The move, announced in January this year, is aimed at addressing overcapacity and trade tensions, but it also implies higher export costs and potential margin pressure, potentially accelerating consolidation in affected sectors. 

Other key markets

Colombia

Central bank rift raises policy uncertainty, markets turn volatile

Markets were volatile in Colombia over the week, driven by a sharp deterioration in the relationship between the government and Banco de la República (BanRep). While the central bank delivered an interest rate hike as expected, the political fallout introduced a new layer of uncertainty that investors are now pricing in.

In a split decision, BanRep raised its policy rate by 100 basis points (1.00 percentage point) to 11.25% in an effort to bring inflation under control, with four members voting in favor of the 100-basis-point increase, two voting for a 50-basis-point reduction, and one voting for no change. However, the meeting took an unexpected turn when Finance Minister Germán Ávila Plaza abruptly left and later signaled a desire to distance himself from the board. He also called for a broader public debate on monetary policy. According to T. Rowe Price Sovereign Analyst Chris Mejia, while the minister cannot formally withdraw, his absence—or failure to appoint a delegate—could complicate future meetings and potentially block decision-making under existing rules.

Until now, markets had been focused primarily on inflation and the path of interest rates, with some expectations that rates could rise toward ~13%. That focus is now shifting, as investors grow increasingly concerned about institutional credibility—specifically, whether political pressure could interfere with central bank independence—raising fears that upcoming rate decisions in April and June could be delayed or challenged legally, increasing the risk of policy paralysis.

India

RBI steps up currency defense, triggering volatility across markets

Indian sovereign yields climbed on the back of higher oil prices, while the central bank took a series of aggressive steps to stabilize the rupee after a period of sharp depreciation. The Reserve Bank of India (RBI) tightened rules on foreign exchange markets—most notably restricting banks’ ability to offer offshore derivatives such as non-deliverable forwards—in an effort to curb speculative pressure on the currency. These measures triggered sharp moves across markets: The rupee initially strengthened as banks rushed to unwind dollar positions, while equities—particularly banking stocks—came under pressure as investors priced in potential trading losses and tighter financial conditions.

At a high level, the RBI is trying to reduce “one-way bets” against the rupee. By limiting offshore trading activity and forcing adjustments in bank positioning, policymakers are shifting from traditional intervention (buying/selling dollars) toward directly influencing market behavior. The impact has been visible in currency markets, where the rupee experienced volatile but ultimately firmer trading through the week, and in equities, where financial stocks declined amid concerns over earnings headwinds tied to foreign exchange exposures.