Key Points
This week, financial markets were heavily influenced by U.S. tariff policies, particularly affecting technology imports from China. The uncertainty led to significant movements in stock indices, currencies, and commodities, with investors turning to safe-haven assets like gold and certain currencies.
The S&P 500 and Nasdaq Composite experienced notable declines, driven by tariff-related fears and new chip export restrictions impacting companies like Nvidia. Meanwhile, Goldman Sachs bucked the trend with strong earnings, but LVMH’s sales drop signaled potential weakness in consumer spending.
Investors are now focused on upcoming earnings from tech giants like Tesla (TSLA) and Amazon (AMZN) and potential central bank actions, particularly from the Bank of England, which may cut rates soon due to cooling UK inflation.
The week of April 14 to April 18, 2025, was characterized by significant volatility in global financial markets, driven primarily by developments in U.S. tariff policies and their far-reaching effects on equities, currencies, and commodities. President Donald Trump's clarification that technology products from China would be subject to a 20% tariff, rather than the previously mentioned 145%, initially spurred gains in Nasdaq futures. However, ongoing uncertainties, coupled with new chip export restrictions, led to sharp market reversals, particularly in the technology sector. This recap highlights the key events and trends that traders and investors should note.
The S&P 500 recorded a 2.7% weekly loss, despite a modest 0.1% gain on Thursday, reflecting broader market concerns over tariff-related uncertainties and declines in key sectors. The index is down 13.9% year-to-date, underscoring the challenging environment for equities. The Nasdaq Composite exhibited significant volatility, initially rising 2% on tariff clarifications but later plunging 3% as the White House imposed new chip export controls. The Dow Jones Industrial Average also declined, losing 700 points or 1.7% during the week.
The technology sector faced intense pressure due to new U.S. export restrictions on chips to China. Nvidia, a leader in the AI chip market, saw its stock slump over 6% in pre-market trading after disclosing a $5.5 billion charge related to export licenses for its H20 AI chip. The H20 chip, a significant revenue driver expected to generate $12-15 billion in 2024, is now subject to national security-related export controls. Other chipmakers were also affected, with Advanced Micro Devices (AMD) dropping 7.4%, and Broadcom and Micron Technology (MU) each falling 2.4%. These developments highlight the vulnerability of the tech sector to escalating U.S.-China trade tensions.
The U.S. dollar weakened significantly, with the dollar index falling to a three-year low below 100.00, a level last seen in April 2022. This decline, representing an 8% drop year-to-date, was driven by tariff uncertainties and cooling U.S. inflation, which reduced the dollar's appeal relative to other currencies.
The euro extended its rise for the third consecutive day, reaching above $1.14, as tariff confusion from the White House prompted traders to favor safer currencies. The uncertainty surrounding Trump's tariff policies, particularly the clarification that tech products face a 20% tariff, fueled dollar weakness and bolstered the euro's appeal.
The British pound was a standout performer, rising for seven consecutive days and reaching a seven-month high above $1.3280. Earlier in the week, it hit a six-month high above $1.3220. The pound's strength was supported by both the dollar's weakness and domestic factors, notably UK inflation cooling to 2.6% in March from 2.8%, below the forecasted 2.7%. Core inflation also eased to 3.4% from 3.5%, increasing expectations for a Bank of England (BoE) rate cut, potentially at its May 8 meeting, with current rates at 4.5%.
The Japanese yen gained nearly 10% against the dollar year-to-date, with the USD/JPY pair bouncing off support at ¥141.60 after touching ¥142.70, a level that has held since late September. The yen's strength was fueled by tariff fears and the White House's rhetoric, which raised concerns about U.S. inflation and weakened the dollar. Traders rotated into the yen as a safe-haven asset, particularly as chip stocks and the Nasdaq faced significant declines.
Gold emerged as a key beneficiary of the week's uncertainties, reaching new record highs near $3,300 per ounce and logging year-to-date gains exceeding 25%. The precious metal rose 0.6% to $3,230 per ounce mid-week, close to its prior record of $3,250, before climbing to $3,290. Gold's market value increased by over $4 trillion, driven by its status as a safe-haven asset amid tariff-driven market jitters. In 2025, gold has outperformed other assets, with the S&P 500 down 8% and Bitcoin down 10% year-to-date.
UK inflation cooled to 2.6% in March from 2.8% in February, below the forecasted 2.7%, with core inflation easing to 3.4% from 3.5%. This softer-than-expected data increased market expectations for a BoE rate cut, potentially at its next meeting on May 8, as the central bank maintains borrowing costs at 4.5% amid global trade concerns.
Federal Reserve Chair Jay Powell warned that tariffs could lead to both temporary and persistent inflation, adding to market concerns about the economic outlook. In a significant political development, President Trump expressed intentions to remove Powell before his term ends, criticizing his handling of interest rates. This rhetoric heightened policy uncertainty, contributing to market volatility.
China replaced its top trade negotiator with Li Chenggang, a move that could signal shifts in its approach to trade negotiations with the U.S. amid escalating tensions. This development is particularly relevant given the new U.S. chip export restrictions and ongoing tariff disputes.
Treasury Secretary Lutnick indicated temporary tariff exemptions on devices like computers and smartphones, with new duties expected in "a month or two" to focus on reshoring semiconductors and chips. However, the lack of clarity continued to impact corporate planning, particularly for quarterly capital expenditures.
The market is gearing up for significant earnings reports next week, including Tesla (TSLA) on Tuesday, and Amazon (AMZN) and Alphabet (GOOG)on Thursday. These reports will provide critical insights into the health of the technology sector, which has been under pressure from trade-related developments.
The following table summarizes key market movements for the week:
| Asset | Weekly Performance | Key Driver |
| S&P 500 | -2.7% | Tariff uncertainties, chip stock declines |
| Nasdaq Composite | -3% | Chip export restrictions, tech sector selloff |
| Gold (XAU/USD) | +0.6% to $3,290 | Safe-haven demand amid tariff fears |
| U.S. Dollar Index | Below 100.00 | Tariff confusion, cooling U.S. inflation |
| Above $1.14 | Dollar weakness, safe-haven demand | |
| Above $1.3280 | Dollar weakness, cooling UK inflation | |
| ¥141.60 support | Yen as safe-haven, tariff-driven dollar weakness | |
| Nvidia (NVDA) | -6% | U.S. chip export restrictions ($5.5B charge) |
| Goldman Sachs (GS) | +2% (pre-market) | Strong Q1 earnings, record trading revenue |
| LVMH (MC) | -8% | Surprise 3% Q1 sales drop, luxury spending concerns |
The week of April 14-18, 2025, was marked by heightened market volatility driven by U.S. tariff policies, particularly affecting the technology sector and leading to significant movements in currencies and commodities. Safe-haven assets like gold, the euro, the British pound, and the Japanese yen gained favor as investors sought stability amid uncertainties. Corporate performances were mixed, with Goldman Sachs reporting strong earnings, while LVMH’s sales drop raised concerns about consumer spending. Policy developments, including Trump’s call to remove Fed Chair Powell and China’s trade negotiator change, underscored the fragile global economic outlook. Looking ahead, investors will focus on upcoming tech earnings and central bank decisions, particularly from the BoE, for further market direction.