MarketWatch for March 2025
- Leanne Lancaster
- 09 April 2025
- 3 mins reading time
Source: FactSet, 8 April 2025. Figures are monthly price returns in local currencies for March 2025.
March was a challenging month for global shares, with investor concerns over trade tariffs causing broad declines. However, there were some bright spots, particularly in emerging markets, which outperformed their developed counterparts. Let's take a closer look at how different regions and sectors fared.
US
US shares experienced a decline in March due to worries about trade tariffs and public sector job cuts, which could slow growth and put pressure on consumers. Most sectors saw declines, with the exception of energy and utilities.
Eurozone
Eurozone shares also fell in March, driven by concerns over the impact of US tariffs on cars and other goods. The consumer discretionary sector was among the hardest hit, along with real estate and information technology. On the positive side, utilities, energy, and financials saw gains.
UK
UK equities were down in March, with the financials, consumer discretionary, and healthcare sectors being the largest detractors. However, energy, utilities, and telecoms contributed positively to performance.
Japan
Japanese shares managed a small gain in March despite uncertainty surrounding US tariff policies. Positive factors included inflation and wage growth data, as well as increased defence spending.
Emerging markets
Emerging market equities, as measured by the MSCI EM index, delivered positive returns in March, contrasting with the declines seen in many developed markets. Flat US 10-year Treasury yields and a weaker US dollar supported EM returns, although trade tariff concerns remained prevalent.
Global bonds
In the UK, the Spring Statement prompted close market scrutiny for signs of budget slippage. The Office of Budget Responsibility maintained fiscal headroom at £9.9 billion, supported by positive inflation data, helping gilts recover some earlier losses. In the US, Treasuries outperformed other major government bond markets amid ongoing policy uncertainty, leading to expectations of weaker growth.
German Bunds saw a significant sell-off in March, with yields experiencing their largest daily rise since reunification in 1990. The yield curve, which charts the term premium of a bond, steepened as longer-dated bonds rose in anticipation of higher future borrowing costs, while shorter maturities were supported by expectations of easier monetary policy conditions. When yields rise, bond process fall, reflecting the inverse relationship between the two.
Commodities
Commodities saw gains in March. Precious metals and livestock were the standout performers within the broad commodity index, while agriculture lagged behind as the worst-performing component.
Important information
Please note any past performance mentioned is not a guide to future performance and may not be repeated. The sectors, securities, regions, and countries shown are for illustrative purposes only and are not to be considered a recommendation to buy or sell.
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