Key Highlights for February 2025
- Global bonds rallied, outpacing equity markets as concerns mounted that a change in global trade dynamics would weigh on economic growth. Expectations for the pace of monetary easing fluctuated as investors balanced signs of stickier inflation against the potential for negative growth implications from higher tariffs.
- Indeed, the scope of US tariff policy broadened in February. New policy updates targeted Europe and nations that levy higher tariff rates on the United States, as well as specific industries, such as autos, lumber, minerals, pharmaceuticals, and semiconductors. Uncertainty around specific details remained.
- Emerging markets equities outperformed global peers, led by Chinese tech stocks. Strong earnings reports, AI-related enthusiasm, and hints of a friendlier regulatory environment supported the sector. Investors continued to rotate to non-US equities as US stocks retreated on softer economic data and policy uncertainty. This rotation also favored value strategies over growth counterparts.
- Gold hit a new nominal high as uncertainty mounted and the US dollar declined.