A Strong Rebound >>>
Market Update: A Strong Rebound Amid Uncertainty
Equities Bounce Back
Global equities staged a sharp rebound in recent weeks, recovering the steep losses from earlier in April. Positive earnings surprises - particularly from financials, technology, utilities, and communication services - have lifted investor sentiment, even as trade tensions and macroeconomic uncertainty linger.
Hopes for a revival in US-China trade talks also supported markets, with reports suggesting Beijing is reviewing Washington’s recent outreach. While any concrete progress remains uncertain, the prospect alone has helped ease nerves.
Best of Times, Worst of Times
April proved to be a volatile month for markets. At one point mid-month, both global and US equity indices were down more than 10%. However, as of now - measured in US dollar terms - both have not only recovered but returned to positive territory for the month.
Last week’s rally was driven largely by a robust earnings season. Expectations rose more than 2% across four key sectors: financials, tech, communication services and utilities. Many companies acknowledged ongoing trade policy uncertainty, yet still delivered solid results - highlighting the strength of underlying fundamentals despite the noise.
US Growth: A Closer Look
The first-quarter US GDP print showed a -0.3% contraction, marking the first decline since the pandemic. While the headline suggests weakness, the detail tells a different story. The drop was largely due to a surge in imports as firms moved to front-load purchases ahead of tariff deadlines. Excluding this one-off impact, the domestic growth picture remains resilient. In short, this was a policy-driven blip - not a broader economic slowdown.
China: Quiet Signals of Movement
China also helped support sentiment last week. Rumours emerged that Beijing is evaluating potential re-engagement with the US on trade. Mounting economic pressures at home may be encouraging a more flexible approach from Chinese leadership. While US claims of imminent progress have been downplayed by Chinese officials, the momentum toward renewed talks appears to be building.
Looking Ahead: Bank of England in Focus
Thursday:Â Bank of England rate decision
Markets expect a 25bp cut to 4.25%, driven by increasing economic uncertainty. While inflation remains a near-term concern, the broader data supports a more accommodative stance. Governor Andrew Bailey is likely to strike a cautious tone, presenting the move as the beginning of a measured and gradual easing cycle rather than a pivot to aggressive stimulus.