Weekly Market Roundup: Navigating Tariff Tremors and Regional Divergence

Overview of Global Sentiment

The trading week ending May 23, 2025, was marked by a significant uptick in investor anxiety and notably divergent performances across global stock markets. A primary catalyst for this widespread unease was the sharp revival of trade war concerns, predominantly ignited by new tariff threats emanating from the U.S. administration.¹ This development cast a shadow over markets that had, in previous weeks, found some solace in what appeared to be a softening of trade rhetoric.¹

While U.S. and several European markets faltered under the weight of these renewed protectionist threats, Asian markets, on the whole, demonstrated greater resilience. In India and Australia, specific domestic factors, including central bank actions and national budget considerations, played a crucial role in shaping local market trajectories. Broader economic themes, such as the fiscal health of the United States, inflationary pressures in key economies, and evolving central bank outlooks, also contributed significantly to the complex tapestry of the week’s market movements.

U.S. Markets: Tariff Threats and Fiscal Worries Weigh on Indices

U.S. stock markets concluded the week with substantial losses, as investor sentiment soured significantly by Friday. The renewed prospect of escalating trade tensions, coupled with ongoing anxieties about the nation’s fiscal health, proved too burdensome for equities.

Major Index Performance

On Friday, May 23, the Dow Jones Industrial Average registered a decline of 0.6%, while the S&P 500 benchmark index fell by 0.7%. The technology-heavy Nasdaq Composite experienced a more pronounced drop of 1%.¹ These daily losses compounded into a challenging week for U.S. equities. For the week, both the Dow Jones Industrial Average and the Nasdaq Composite shed 2.5% of their value. The S&P 500 recorded a weekly loss of 2.6%, marking a four-day losing streak for the broad market index.¹

This downturn was significant enough to push both the Dow and the S&P 500 back into negative territory for the year 2025. As of the week’s close, the S&P 500 is down 1.3% year-to-date, the Dow Jones Industrial Average is off 2.2% year-to-date, and the Nasdaq Composite has relinquished 3% since the beginning of the year.¹ These figures represent a stark reversal of the optimism seen in three of the preceding four weeks, during which markets had rallied on perceptions of a more conciliatory U.S. stance on trade.¹

Table 1: U.S. Major Stock Indices Performance (Week Ending May 23, 2025)

Data Sources: ¹

Key Drivers of Decline

Several potent factors converged to drive U.S. markets lower during the week.

Renewed Tariff Threats: The most immediate trigger for the market downturn appeared to be fresh tariff threats from President Donald Trump. He publicly suggested the possibility of imposing a 50% tariff on goods imported from the European Union, potentially starting as early as June 1. Furthermore, a 25% tariff was mooted for Apple if the tech giant continued its overseas manufacturing operations.¹ These pronouncements swiftly rekindled fears about the unpredictable trajectory of U.S. trade policy. Investors grew increasingly concerned about the potential adverse effects such tariffs could have on global economic growth, international trade flows, and ultimately, corporate profitability.¹ The market’s sharp negative reaction underscored its heightened sensitivity to shifts in trade policy rhetoric, suggesting that political pronouncements, rather than purely economic fundamentals, are currently a dominant driver of market volatility. This pattern, where previous optimism based on softened tones was quickly erased by new threats, points to an environment where policy uncertainty commands significant influence.

Federal Deficit and Budget Concerns: Even before the tariff news took centre stage, markets were already exhibiting signs of nervousness early in the week. Rising concerns about the U.S. federal deficit, particularly as a new budget bill made its way through Congress, weighed on investor sentiment.¹ The proposed tax bill, referred to as the “One Big Beautiful Bill,” carries projections of adding approximately $3.8 trillion to the national debt over the next decade.⁵

Moody’s U.S. Debt Downgrade: Adding to the fiscal anxieties, Moody’s Ratings agency had, on May 16, downgraded the U.S. national debt credit rating from Aaa to Aa1. This move stripped the United States of its last perfect credit score from a major rating agency.⁷ The confluence of these fiscal concerns – the rising deficit, the substantial projected increase in national debt from new fiscal measures, and the sovereign credit downgrade – creates a more complex and challenging backdrop for investors. While tariffs have relatively direct and often sector-specific impacts, issues of debt sustainability carry broader, systemic implications. These can affect borrowing costs across the economy, influence the value of the U.S. dollar, and shape perceptions of long-term economic stability, potentially interacting negatively if, for instance, tariff-induced economic slowdowns exacerbate the deficit.

Sector and Stock Highlights

The week’s developments led to notable movements across various sectors and individual stocks.

Tech Sector Under Pressure: The technology sector, often sensitive to trade news and global economic outlooks, faced significant selling pressure. Apple shares were particularly affected by President Trump’s specific tariff threat, dropping nearly 4% in premarket trading on Friday and extending what was already an eight-day losing streak.¹ Other mega-cap technology stocks also suffered, with Microsoft (MSFT), Nvidia (NVDA), Amazon (AMZN), Alphabet (GOOG), and Meta Platforms (META) each declining by more than 1%. Tesla (TSLA) and Broadcom (AVGO) also recorded losses.¹ Nvidia faced additional headwinds from concerns over tightened U.S. export controls on its H20 chips destined for China, with an estimated potential revenue loss of $15 billion.⁴

Notable Gainers:

• Intuit (INTU): Shares of the financial software company surged between 8.1% and 8.6% during the week.¹ This strong performance was fueled by robust fiscal third-quarter earnings and an optimistic increased full-year forecast. Intuit may also stand to benefit from the potential elimination of the free IRS direct tax filing system under discussion.¹
• US Steel (X): The steel producer’s shares jumped a remarkable 21% on Friday. The rally followed an announcement by President Trump regarding a partnership between US Steel and Japan’s Nippon Steel, which appeared to resolve a prolonged period of uncertainty surrounding a potential deal and included promises of significant job creation.¹
• Renewable Energy Stocks: After facing pressure earlier in the week due to proposed legislative changes that could remove green energy incentives, some renewable energy firms staged a partial recovery on Friday. Enphase Energy (ENPH) saw its shares rise by 4.3%, and AES Corp. (AES) shares clawed back 3.7%.¹

Notable Decliners (Company Specific):

• Deckers Outdoor (DECK): The footwear company’s shares plummeted 20%, leading the decliners in the S&P 500. The sharp drop came after Deckers refrained from providing full-year guidance, citing uncertainties related to tariffs and trade policy.¹
• Ross Stores (ROST): The discount retailer saw its shares fall by 9.8%. Ross Stores also decided to shelve its full-year guidance, pointing to a lack of visibility on tariffs and their potential business impact. The company’s CEO highlighted that while direct imports are limited, more than half of the products sold at Ross originate in China, making the business vulnerable to higher tariffs.¹ The struggles of retailers like Ross Stores, directly linking their concerns to China sourcing, and the plunge in Deckers shares, underscore that the impact of trade tensions extends beyond just technology manufacturing, indicating a wider potential effect on consumer goods and retail sectors that rely on global supply chains.
• Workday (WDAY): Shares of the cloud-based software provider sank approximately 13%. This decline was attributed to a lacklustre outlook for subscription revenue and growing concerns about competitive pressures in the human resources and financial management software market.¹

Broader Market Indicators

10-Year Treasury Yields: Yields on 10-year U.S. Treasury notes exhibited volatility throughout the week. They rose to a three-month high of 4.63% before retreating to settle at 4.51% by Friday’s close.¹ An increase in Treasury yields can often signal diminishing investor confidence in equities, as bonds may appear relatively more attractive.

Volatility (VIX): The Cboe Volatility Index (VIX), often referred to as the market’s “fear gauge,” rose during the week, indicating an increase in investor caution and expectations of higher near-term market volatility.⁴

European Markets: A Mixed Bag Amid Transatlantic Trade Tensions

European stock markets navigated a turbulent week, presenting a mixed performance across different bourses but largely unsettled by the ominous tariff threats emanating from the United States.⁶ The potential for a new front in trade disputes weighed heavily on investor sentiment, particularly in export-oriented economies.

Overall European Market Performance

The pan-European STOXX 600 index reflected the cautious mood, closing down 0.93% on Friday. For the week, the index registered a cumulative decline of 0.75%.³ Similarly, the Eurozone STOXX 50 index, which tracks blue-chip companies in the Euro area, fell 1.81% on Friday and ended the week 1.86% lower.³ This broad weakness underscores the significant vulnerability of European markets to external trade policy shocks, particularly those originating from the U.S. This susceptibility appeared to overshadow some positive domestic economic data and regional forecasts, indicating that geopolitical trade risks are currently a more dominant driver of overall market direction than domestic fundamentals.

Impact of U.S. Tariff Threats

President Trump’s suggestion of imposing a hefty 50% tariff on goods imported from the European Union sent immediate shockwaves across European markets.⁴ This threat particularly rattled sectors with significant exposure to the U.S. market. European luxury goods shares experienced a sharp sell-off on Friday following the announcement.⁹ The automotive sector, another critical component of European exports, also saw its shares fall by over 3%.³ The direct impact on these key sectors illustrates the immediate, concentrated damage such tariffs could inflict. However, the broader implication is a potential drag on overall Eurozone economic activity if these tariffs materialise. This could affect export volumes, dampen corporate investment, and potentially erode consumer confidence, thereby challenging the European Commission’s growth forecasts for the region.

United Kingdom (FTSE 100)

In contrast to some of its continental peers, the UK’s FTSE 100 index managed to eke out a slight gain for the week, rising 0.38% to close at 8717.97.¹¹ This marked its second consecutive week of gains and represented an advance in five of the past six weeks. Another market report indicated a weekly gain of approximately 0.6%, with the index trading around 8,747.13 mid-Friday.¹² However, the index was not immune to the broader negative sentiment on Friday, closing down 0.24% on the day.¹¹

Economic Data:

• Retail Sales: A bright spot for the UK economy was the release of strong retail sales data. Sales surged by 1.2% month-over-month in April, significantly exceeding consensus expectations of a 0.2% rise. Year-over-year, retail sales were up 5%. This robust performance was attributed partly to favourable weather conditions and the timing of the Easter holiday.⁵ In currency markets, the British pound strengthened on this news, topping the $1.35 mark against the U.S. dollar, a level not seen since February 2022.¹²
• PMI Data (Flash May): The S&P Global/CIPS Flash UK Manufacturing PMI for May indicated a contraction, falling to 45.1 from 45.4 in April. However, the Services PMI showed an expansion, rising to 50.2 from 49.0. The Composite PMI, which blends manufacturing and services, rose to 49.4 from 48.5, still in contraction territory but showing improvement.¹³
• Inflation: According to the Bank of England’s May Monetary Policy Report, Consumer Prices Index (CPI) inflation fell to 2.6% in March. However, the central bank anticipates a temporary rise in inflation to 3.7% during 2025 (forecast at 3.4% for Q2 and 3.5% for Q3), largely due to higher energy prices. Inflation is then expected to fall back towards the 2% target.¹⁴

Sector News: Mining companies provided support to the FTSE 100, with Antofagasta, Anglo American, and Glencore all posting gains. Budget airline easyJet saw its shares rebound after earlier declines. Energy giants Shell and BP also advanced during the week.¹²

Germany (DAX)

Germany’s DAX index experienced significant volatility. While one source on Friday cited a closing level of 23,999 ¹⁵, data from Allianz indicated the DAX at 23,653, down 1.4% on Friday, although still up a strong 18.8% year-to-date.¹⁶ Another report suggested the DAX fell by a sharper 2.4% on Friday directly in response to President Trump’s tariff pronouncements.¹⁷

Earlier in the week, and indeed over the preceding month, the DAX had exhibited bullish momentum, even reaching new record highs. This earlier strength was attributed to an apparent easing in U.S.-China trade tensions and growing expectations of interest rate cuts by the European Central Bank (ECB).¹⁸ However, the renewed U.S. tariff threats specifically targeting the EU led to a sharp reversal in sentiment by the week’s end. Weekly performance data for the DAX was not consistently detailed across sources for the full week.

France (CAC 40)

The French CAC 40 index ended the week 1.93% lower at 7734.40, marking its largest one-week percentage decline since April 11, 2025.¹⁹ The selling pressure was most acute on Friday, with the index losing 1.65% according to one source ¹⁹, while other reports indicated steeper falls ranging from 1.7% ¹⁰ to 2.2% ¹⁷, directly attributed to the U.S. tariff threats.

Economic Data: Adding to the market’s woes, domestic data showed a drop in French consumer confidence. The confidence index fell to 88 in May from a revised 91 in April, missing analysts’ forecasts. Notably, concerns about unemployment jumped sharply, further weighing on market sentiment.²⁰ On Friday, prominent French stocks such as Pernod Ricard, Essilor, Hermes International, and Veolia Environment were down between 1.5% and 2%.²⁰

Eurozone Economic Outlook

The European Commission released its Spring 2025 Economic Forecast during the week, projecting moderate real GDP growth of 0.9% for the euro area in 2025. This growth rate is similar to that achieved in 2024 and is expected to pick up to 1.4% in 2026. For the broader European Union, growth was forecast at 1.1% in 2025, rising to 1.5% in 2026.²¹

Inflation in the euro area is anticipated to continue its downward trend, falling from an estimated 2.4% in 2024 to 2.1% in 2025, and further to 1.7% in 2026. The Commission suggested that inflation could meet the ECB’s target by mid-2025.²¹ The labour market across the EU is expected to remain robust, with the unemployment rate projected to fall to a new historic low of 5.7% in the EU by 2026.²¹

Regarding monetary policy, while specific ECB policy statements for the week were not prominent in the available information, earlier DAX analysis had pointed to growing expectations of looser monetary policy from the ECB, with some policymakers reportedly openly discussing the possibility of another interest rate cut in the near future.¹⁸

The strengthening of the pound against the dollar, driven by strong UK retail sales, and the general weakness of the U.S. dollar, could offer a slight buffer for UK and European exporters if these currency trends are sustained. The euro also traded higher against the dollar, moving to $1.1347 from $1.1285 late Thursday.¹² However, the primary driver for equity market declines this week was the tariff news itself, suggesting currency effects were secondary in this acute phase of trade anxiety.

Table 2: European Major Stock Indices Performance (Week Ending May 23, 2025)

Data Sources:.³ DAX weekly change is noted as N/A due to conflicting end-of-week data and lack of a clear weekly summary figure.

Asian Markets: Resilience and Regional Specifics

Asian stock markets generally exhibited greater resilience during the week compared to their Western counterparts, although volatility was certainly present. Most regional indices managed to post gains on Friday, May 23, despite lingering U.S. fiscal concerns, partly aided by a retreat in U.S. Treasury yields.⁵

Overall Asian Market Performance

The ability of some Asian markets, particularly China, to rally on specific positive news related to their direct trade dynamics—such as hopes for U.S.-China tariff de-escalation—even as broader global sentiment was hit by other U.S. tariff threats (e.g., against the EU), suggests a degree of regional focus. This may indicate that markets in the region had already priced in a certain level of U.S.-China tension, allowing them to react more selectively to new developments.

Japan (Nikkei 225 & TOPIX)

Japan’s Nikkei 225 and TOPIX indices both climbed 0.8% on Friday.⁵ One report placed the Nikkei at 37,160.47, up 0.47% at the time of writing on Friday ²⁴, while another, likely reflecting a different timing or daily change, showed it at 36,986.¹⁵ Overall, the tone for Japanese equities was positive for the week.

Key Influencers:

• Inflation Data: A significant domestic development was the surge in Japan’s core Consumer Price Index (CPI), which rose to a two-year high of 3.5% in April. This figure exceeded forecasts and accelerated from 3.2% in March, increasing the odds of an interest rate hike by the Bank of Japan (BOJ). Some analysts now anticipate a 25 basis point hike as early as July.⁵
• US-Japan Trade Talks: Trade negotiations between the U.S. and Japan continued to intensify, with a fourth round of talks scheduled for May 30. Japan is reportedly maintaining its demand for complete tariff elimination on its goods.⁵
• Yen Movement: The Japanese yen strengthened by 1.5% against the U.S. dollar over the course of the week.⁵

The Japanese market’s ability to advance despite a notable rise in core inflation and increasing expectations of a BOJ rate hike presents an interesting dynamic. This could be indicative of underlying strength in the Japanese economy, investor confidence that the BOJ will manage its policy normalisation smoothly, or perhaps global capital seeking attractive alternatives and finding Japan appealing despite these domestic policy shifts. The concurrent strengthening of the Yen lends some support to this interpretation of underlying confidence.

China (Shanghai Composite & CSI 300)

Chinese markets outperformed on a weekly basis. The Shanghai Composite Index gained 0.5% for the week, and the CSI 300 index, which tracks larger cap stocks, rose by 0.9%.⁵

Key Influencers:

• Tariff De-escalation Optimism: These gains were partly attributed to optimism regarding a potential de-escalation in U.S.-China trade tensions. This sentiment followed an earlier U.S. pause on massive tariffs and what had seemed like a softer tone from President Trump regarding China trade, although new threats emerged later in the week targeting the EU and Apple specifically.¹
• Industrial Production: China’s industrial production data for April was closely watched for early indications of the impact of existing tariffs. While production had been strong in the first quarter and remained so in April, concerns about a potential contraction persist due to ongoing tariff uncertainty. Notably, new orders decelerated in April, signalling potential future softening.⁷

Hong Kong (Hang Seng Index)

The Hang Seng Index in Hong Kong rose 0.5% on Friday, contributing to an overall weekly gain of 1.1%.⁵ One source, possibly reflecting a daily change, showed the Hang Seng at 8,558, down 1.2%.¹⁵

South Korea (KOSPI)

While specific weekly performance figures for South Korea’s KOSPI index were not detailed in the provided materials, the South Korean won gained 0.5% against the U.S. dollar for the week, which often suggests positive underlying sentiment in the equity market.⁵

Other Regional News

Foxconn’s India Expansion: A notable development with broader implications was the news that Apple supplier Foxconn is pressing ahead with its expansion plans in India. This includes a $1.5 billion investment in a display facility and a $450 million chip assembly plant. These moves come despite U.S. administration pressure to onshore manufacturing activities and highlight India’s growing emergence as a significant alternative manufacturing hub to China.⁵ This is a clear manifestation of the ongoing global supply chain diversification trend, driven by a desire from multinational corporations to mitigate geopolitical risks associated with U.S.-China tensions and reduce over-reliance on a single manufacturing geography. Such shifts have long-term implications for global trade patterns and international investment flows.

Table 3: Asian Major Stock Indices Performance (Week Ending May 23, 2025)

Data Sources:.⁵ Nikkei weekly change estimated as positive based on daily gains and qualitative descriptions. Closing values for Shanghai and Hang Seng not uniformly available for May 23 in weekly summary snippets.

Indian Market: A Strong Finish to a Volatile Week

The Indian stock market experienced a week of fluctuations but ultimately concluded on a decidedly positive note, driven by a significant rebound in investor sentiment on Friday, May 23.²⁵

Major Index Performance (Sensex & Nifty 50)

On the final trading day of the week, the BSE Sensex surged by 769.09 points, or 0.95%, to close at 81,721.08. Concurrently, the NSE Nifty50 index climbed 243.45 points, or 0.99%, to settle at 24,853.15.²⁵ This strong Friday performance was crucial in offsetting earlier weakness. For instance, the Sensex had dipped 0.79% on Thursday, May 22, and had dropped 1.06% on Tuesday, May 20.²⁵ Despite this midweek volatility, the robust end to the week ensured a positive weekly close for the benchmark indices. The strong Friday rebound, propelled by broad-based domestic buying across key sectors, suggests that robust local sentiment and specific positive corporate news were able, at least temporarily, to overcome global anxieties or midweek profit-taking.

Drivers of the Rebound

The impressive gains on Friday were primarily attributed to broad-based buying activity across several key sectors. Information Technology (IT), Fast-Moving Consumer Goods (FMCG), financial services, and banking stocks were at the forefront of this rally.²⁵ On the National Stock Exchange, the Nifty FMCG and Nifty Private Bank indices were standout sectoral performers on Friday, registering gains of over 1.63% and 1.08%, respectively. Other sectors including IT, Financial Services, Metal, PSU Bank, Oil & Gas, and Realty also recorded healthy gains.²⁶ This widespread participation indicated a renewal of investor confidence as the market headed into the final week of May.²⁵

Key News and Corporate Earnings

Q4FY25 Earnings: The corporate earnings season continued to influence stock-specific movements.

• Sun Pharma: The pharmaceutical major reported a 19% year-on-year decline in its net profit for the quarter, which amounted to ₹2,153.9 crore. This performance fell short of market expectations, and the company’s shares subsequently dropped.²⁵
• NALCO: In contrast, National Aluminium Company (NALCO) posted strong Q4 results, with its net profit jumping 105% year-on-year to ₹2,078 crore.²⁵
• Other Company News: Emcure Pharmaceuticals saw its shares hit the 10% upper circuit limit following its Q4 earnings announcement. Ashok Leyland shares traded higher in anticipation of its results.⁴

Wipro’s Warning: IT services giant Wipro issued a cautionary note regarding its future performance. The company warned that rising tariffs, ongoing trade tensions, and potential changes in U.S. immigration laws could negatively impact its revenue and operations. This is a significant concern for Wipro, given its heavy reliance on the U.S. market (which accounts for 62.3% of its revenue) and Europe (27% of revenue).⁴ This warning serves as a crucial reminder that India’s globally integrated sectors, particularly IT, remain susceptible to international policy shifts. While the broader market may rally on domestic factors, these specific sectors could face headwinds if such external risks intensify, potentially creating a performance divergence within the Indian market.

Defence and Drone Stocks: A notable sectoral trend was the significant surge in the shares of defence and drone manufacturing companies. This rally followed ‘Operation Sindoor,’ a military response that reportedly highlighted India’s advanced capabilities in these technological areas. Since early May, stocks like ideaForge Technology, DroneAcharya, and Zen Technologies have seen substantial gains.²⁵ This development highlights how geopolitical events and national security considerations can spur strong, theme-based investment interest in niche sectors, often independent of broader macroeconomic trends.

Market Volatility

The India VIX, an index that measures market volatility expectations, ended Friday lower by 0.57% at 17.16 points.²⁶ A decline in the VIX typically suggests a slight easing of expected market turbulence. Market breadth was positive on Friday, with 2,347 stocks advancing on the BSE compared to 1,600 declining issues. Furthermore, 98 stocks reached their 52-week highs on the exchange during the session.²⁶ The fall in the India VIX, alongside positive market breadth, supports the notion of easing immediate concern among domestic investors.

Table 4: Indian Major Stock Indices Performance (Week Ending May 23, 2025)

Data Sources:.²⁵ Weekly change described as positive based on Friday’s strong rebound overcoming midweek dips.

Oceania Markets: Rate Cuts and Budgetary Influences

Markets in the Oceania region presented a varied picture, with Australia benefiting from monetary policy easing while New Zealand contended with the implications of its national budget.

Australia (ASX)

Australian shares concluded the week on a higher note, with the benchmark S&P/ASX index gaining approximately 0.3%.⁶ The ASX All Ordinaries index was reported at 8,611.70 on Wednesday, May 21, having risen 0.45% that day.²⁴

Key Driver: RBA Rate Cut: A pivotal factor bolstering the Australian market was a “dovish” interest rate cut by the Reserve Bank of Australia (RBA). The central bank reduced its official cash rate from 4.1% to 3.85%.⁶ This decision signalled that the RBA was perhaps less concerned about immediate inflationary pressures but increasingly wary about the economic growth outlook, particularly given the risks posed by U.S. trade wars.⁶ The RBA’s action directly buoyed the Australian market, showcasing the significant influence of central bank decisions on investor sentiment in the region, a contrast to markets where fiscal news or external trade threats held more sway this week. Further rate cuts are anticipated by market observers, with some forecasts suggesting three more reductions, potentially bringing the cash rate to 3.1% by early next year.⁶

Sector Performance: The gains in the Australian market were led by the telecommunications, IT, and financial sectors. These advances managed to offset declines experienced by resources and retail stocks.⁶ The fall in resources stocks connects to global commodity price movements, as oil and iron ore prices declined during the week.⁵ As a major commodity exporter, Australia’s market performance will invariably have an underlying sensitivity to these global factors, even when domestic policy takes precedence in a specific week.

Impact of U.S. Debt Concerns: The upward momentum in Australian shares was somewhat capped by prevailing global risks, including persistent worries about the sustainability of U.S. public debt.⁶

New Zealand (NZX50)

New Zealand’s NZX50 index experienced a decline, falling 0.4% on Friday to end the week down 1%.²⁷ Various sources reported slightly different closing levels for the NZX50 on Friday: 12,662 (flat) ²⁸, 12,596.50 (down 0.52% on the day) ²⁴, and 12,647.36 (down 0.02% on the day).²⁹ According to one source, the index is down 3.55% year-to-date.²⁹

Key Influencers:

• 2025 Budget: The market was actively digesting the details of New Zealand’s 2025 national budget. The fiscal plan revealed a slightly weaker near-term growth outlook for the economy and introduced new tax incentives, which consequently led to revised government revenue forecasts.²⁹ The market’s reaction to its national budget and domestic retail sales data indicates a higher sensitivity to local fiscal policy and economic indicators compared to broader global trade narratives this week, a characteristic often seen in smaller, more domestically-focused economies.
• Retail Sales Data: On a more positive note, retail sales in New Zealand rose by 0.8% quarter-on-quarter in the first quarter of 2025.²⁹

Notable Stock Movements (Weekly):

• Gainers: Key gainers for the week included Gentrack (GTK), which rose 1%; Channel Infrastructure (CHI), up 3%; and Sky Network Television (SKT), which climbed 6%.²⁷
• Losers: Among the notable decliners were Heartland Group (HGH), which fell 9% for the week. Infratil (IFT) was down 3% on Friday, though it had gained over the month. Fisher & Paykel Healthcare (FPH) also fell 2% on Friday but was up for the month. Kathmandu (KMD) slipped 1% on Friday.²⁷

The share price for Oceania Healthcare (OCA), based on data up to May 9, 2025, showed a year-to-date decline of 14.18%.³⁰

Table 5: Oceania Major Stock Indices Performance (Week Ending May 23, 2025)

Data Sources:.⁶ ASX closing value for the week not uniformly available, weekly change is an approximation. NZX50 closing value is an approximation from available daily data.

Global Economic Highlights & Other Market Movers

Beyond the specific regional equity market performances, several global economic factors and movements in other asset classes played a significant role during the week.

Commodities

• Oil Prices: Crude oil prices declined for the fourth consecutive session, marking their first weekly drop in three weeks. Brent crude futures fell to around $63.53 per barrel, translating to a weekly loss of approximately 1.9%. West Texas Intermediate (WTI) crude settled around $60.87 per barrel, down 2.5% for the week.⁵ In India, crude oil futures on the MCX also slipped, partly due to perceptions of weak global demand cues.⁴ A key factor contributing to this decline was reports suggesting that OPEC+ (the Organisation of the Petroleum Exporting Countries and its allies) is considering an increase in oil production by 411,000 barrels per day for July. In anticipation of potential supply increases, U.S. crude storage demand reportedly surged.⁵ This highlights the oil market’s ongoing sensitivity to supply-side decisions from the cartel, which can often override or exacerbate demand-side signals.
• Gold: The precious metal experienced a significant surge in demand. Spot gold prices climbed to levels between $3,345.99 ⁴ and $3,358.03 per ounce.³ This represented a weekly gain of around 4.5% to 5%, marking its best weekly performance in six weeks.¹ The rally was attributed to increased safe-haven demand spurred by President Trump’s renewed tariff threats, a weakening U.S. dollar, and growing concerns over U.S. debt sustainability.⁴
• Copper: Industrial metal copper saw its price rise during the week, with COMEX copper futures up 5.97% for the week.³
• Iron Ore: Iron ore prices fell but managed to find some support, bouncing around the $US100 per tonne level.⁶

Currencies

• U.S. Dollar: The U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, was set for a weekly decline ranging from approximately 1% ⁵ to 1.96%.³ It traded at its lowest level of the month, around the 99.10-99.11 mark.¹ This weakness was primarily driven by escalating fears about the U.S. fiscal deficit, particularly following the passage of President Trump’s tax bill, and the earlier sovereign credit downgrade by Moody’s.⁵ The week clearly demonstrated the classic macroeconomic interplay where concerns over U.S. fiscal health directly pressured the U.S. dollar, which in turn provided a tailwind for dollar-denominated commodities like gold.
• Japanese Yen: The Japanese yen strengthened by 1.5% against the U.S. dollar over the week.⁵ The USD/JPY pair fell 0.4% on Friday alone.⁵
• Other Asian Currencies: Other Asian currencies also broadly gained against the U.S. dollar, with the South Korean won up 0.5% and the Philippine peso rising 0.6% for the week.⁵
• Offshore Renminbi (CNH): The offshore Chinese renminbi rose by over 300 points against the U.S. dollar during Friday’s trading session, breaking the 7.18 level and reaching a six-month high.³

Cryptocurrencies

• Bitcoin: The leading cryptocurrency, Bitcoin, hit a new all-time high during the week, reportedly nearing $112,000. This was its first new peak since before President Trump took office in January 2017. It later settled to around $108,300 by late Friday trading.¹ One report mentioned a significant plunge of over $4,000 from Thursday’s record high.³ The surge was partly attributed to safe-haven demand from some investors amid worries about U.S. debt levels and broader market volatility.⁶ Bitcoin’s rally to an all-time high during a period of significant traditional market stress and a flight to safety (as evidenced by gold’s strong performance) suggests its growing, albeit still debated, consideration by some investors as an alternative store of value or a “digital safe haven.” Its price movements are increasingly scrutinised alongside traditional assets during risk-off periods.

U.S. Treasury Yields

The yield on the 10-year U.S. Treasury note, a key benchmark for borrowing costs, fell to 4.51% by Friday’s close. This was after reaching as high as 4.63% earlier in the week, its highest level in over three months.¹ Bond yields had risen earlier in the week partly due to renewed worries about U.S. public debt sustainability.⁶

Broader Economic Themes

• U.S. Debt Sustainability: This was a pervasive theme throughout the week, significantly influencing market sentiment. It was fueled by Moody’s sovereign credit downgrade of the U.S. ⁷ and the projected increase in the federal deficit stemming from the newly passed tax bill.⁵ These concerns directly impacted the U.S. dollar and bond yields and contributed to the demand for safe-haven assets.⁶
• Global PMIs: The release of May Purchasing Managers’ Index (PMI) data from various economies was a focus for investors, as these surveys provide timely insights into the health and direction of global economic growth.⁷ While specific global PMI data for the week was not uniformly detailed across all regions in the provided information, UK flash PMIs, for example, showed mixed results.¹³

Conclusion: Key Takeaways from the Week

The trading week ending May 23, 2025, was largely defined by a palpable resurgence of U.S. trade protectionism fears. President Trump’s renewed tariff threats, particularly targeting the European Union and specific U.S. corporations, triggered significant sell-offs in U.S. stock markets and created considerable unease across European bourses. This underscored the market’s heightened sensitivity to geopolitical pronouncements and policy uncertainty.

Concerns over the fiscal health of the United States were amplified by a sovereign credit downgrade from Moody’s and the passage of a controversial budget bill expected to substantially increase the national debt. These factors further weighed on investor sentiment and contributed to a weakening of the U.S. dollar.

In contrast, Asian markets generally displayed greater resilience. Chinese stocks, in particular, registered gains, buoyed by hopes of a de-escalation in U.S.-China specific trade tensions. India’s stock market also finished the week on a strong note, driven by robust domestic buying.

Commodity markets saw divergent trends. Gold shone brightly as a preferred safe-haven asset, rallying to its best week in six. Conversely, oil prices retreated amid expectations of potential supply increases from OPEC+. In the digital asset space, Bitcoin continued its remarkable ascent, reaching a new all-time high during the week.

Overall, the week served as a stark reminder of the market’s current susceptibility to shifts in trade policy and broader geopolitical developments. This environment fostered increased volatility and cultivated a cautious outlook among investors globally as they navigate an increasingly complex and interconnected financial landscape.

Disclaimer

This article is for informational purposes only and should not be construed as financial or investment advice. The information provided herein is based on research material available up to May 23, 2025, and is intended to summarise market events for the week ending on that date.

Investing in stock markets involves inherent risks, and the value of investments can go down as well as up. Past performance is not a reliable indicator of future results. Readers are strongly encouraged to conduct their own thorough research and consult with a qualified independent financial advisor before making any investment decisions.

The views and opinions expressed in this article are those of the analyst, based on the interpretation of the provided information, and do not necessarily reflect the official policy or position of any other agency, organisation, employer, or company. While efforts have been made to ensure the accuracy of the information presented, no guarantee can be given as to its completeness or correctness. ²⁵

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