On March 22, 2025, U.S. stock markets experienced a notable uptick with the Dow Jones rising by 0.08%, the S&P 500 increasing by 0.08%, and the Nasdaq gaining 0.52%. This surge followed remarks made by former President Donald Trump regarding tariff policies, creating a ripple effect across major indices.
The S&P 500 and Nasdaq managed to end their four-week losing streak, a welcome relief for investors. Trump's comments on equivalent tariffs being "flexible" apparently contributed to the rebound, stirring optimism among investors.
Meanwhile, Tesla's stock price surged by more than 5% despite the company experiencing its longest continuous decline since the previous year, having fallen for nine consecutive weeks. Elon Musk held a late-night all-hands meeting where he reminded employees to hold onto their stock and highlighted significant company projects including the Supercharging network, Dojo supercomputer, and Optimus initiative.
In the broader financial context, the People's Bank of China's first quarter monetary policy meeting proposed potential cuts to reserve requirements and interest rates to stimulate the economy. Measures discussed include focusing on long-term interest rate changes and researching innovative structural tools to enhance the effectiveness of monetary policy.
Market reactions varied across regions, as the offshore Chinese yuan fell over 100 points, reaching a new low against the dollar. The U.K.'s Bank of England adopted a hawkish stance, pushing British bond yields up for three consecutive weeks. On the other hand, the dollar index reached a two-week high while the U.S. two-year Treasury yield dropped, reflecting shifting investor sentiment.
Amid these changes, key developments also occurred within the European Union. A landmark bill passed in Germany, effectively ending decades of fiscal prudence by allowing the country to increase its defense spending to over 1% of GDP. This shift signals a significant strategic reorientation regarding defense funding, as Europe aims to bolster its military capabilities further.
In the tech sector, shares of Nvidia faced a downturn of over 3% during the annual GTC conference, even after CEO Jensen Huang showcased new products that were intended to excite investors. The company confronts multiple threats, including ongoing tariffs from the Trump administration, innovations from competitive firms like DeepSeek, and self-sufficiency moves by major clients.
Meanwhile, Bank of America reported a record inflow of capital into the U.S. stock market, indicating a substantial appetite for equities. In a week that saw approximately $43.4 billion in inflows, concerns over trade disputes appear to be waning as retail investors have displayed unprecedented buying behavior. Tesla shares have seen a significant proportion of this activity, with retail investors net buying the stock for 13 consecutive trading days. This trend represents the highest buying pressure seen in a decade, with total investments surpassing $8 billion, despite Tesla’s 17% decline in value during this time.
In contrast, major cryptocurrencies showed volatility as Bitcoin's price dipped below the $84,000 mark during trading hours, while analysts pointed to a high probability of Solana's spot ETF approval in the near future. Two ETFs tracking Solana futures recently launched, indicating growing interest in the cryptocurrency market.
Overall, the global economic landscape is tense and dynamic. Concerns over inflation persist, with the U.S. Federal Reserve losing $776 billion last year largely due to rising interest rates. Projections suggest continuing risk for the Fed if short-term rates stay above 4%. Increased consumer spending remains critical as the government aims to balance the budget amid rising deficits.
