GSB Quarterly Market Update – Q1 2025
Written by GSB
In Q1 2025, global markets presented a mixed picture as diverging regional dynamics, persistent inflation, and policy pauses shaped investor sentiment. While the U.S. faced notable equity declines amid renewed trade tensions and downgraded earnings expectations, European and Japanese markets outperformed. Value stocks rebounded, and short-term bonds offered stability amid a backdrop of geopolitical uncertainty and cautious central bank positioning.
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- US: S&P 500 fell 4.6%, the worst quarter since 2022, driven by tariffs, earnings downgrades, and inflation. Tech stocks were hit hardest.
- Europe: Outperformed the U.S. by over 18%, boosted by German stimulus and rotation out of U.S. tech.
- UK: FTSE All Share rose 4.5%, with an 8.1% total return. Strong earnings and undervaluations drove gains.
- Japan: Markets hit multi-decade highs after BoJ’s 2024 rate hike, a weaker yen, and record corporate buybacks.
- Emerging markets: Rebounded, especially Brazil and China, though late volatility returned due to renewed tariff threats.
- Value Stocks: Outperformed growth globally as investors favoured fundamentals in a high-rate environment.
- Short-Term Bonds: Held steady as central banks paused rate changes and investors sought lower-risk assets.
In this quarterly market update, the financial events of the first quarter are discussed as insights into what investors experienced.
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GSB
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GSB Capital Ltd is directly authorised and regulated by the Financial Conduct Authority under licence no. 971774. You can check our details on the public register through fca.co.uk using licence number 971774. Registered address: 1 Cornhill, The City of London, EC3V 3ND, United Kingdom. With respect to those activities GSB performs in or from the United Kingdom, the law applicable to these activities is that of the United Kingdom.
This guide is provided for informational purposes only and should not be construed as advice. Any references to specific tax treatments or rates are for illustrative purposes only and may change. Your personal tax treatment depends on your individual circumstances.
Any market commentary included is based on publicly available data at the time of writing and does not constitute investment advice. GSB Capital Ltd does not accept liability for any decisions made based on this report.
Investing involves risk. The value of investments can go down as well as up and you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. You should seek professional advice before making any financial decisions.
Sources include: JPMorgan Private Bank Q1 2025 Investment Review, Nasdaq First Quarter 2025 Review & Outlook, Bloomberg Finance L.P., Charles Schwab, Office for National Statistics (ONS), European Central Bank (ECB), Bank of Japan, U.S. Treasury Bill Index, market intelligence on artificial intelligence and semiconductor sector performance, fiscal stimulus data from Chinese government communications, International Monetary Fund (IMF), and the World Bank.