World markets grappled with uncertainty on Thursday, kicking off 2025 on a cautious note. Equities faced challenges as concerns over U.S. President-elect Donald Trump’s impending policies and a hawkish Federal Reserve outlook tempered investor sentiment.
Mixed Performance Across Markets
Global shares, which posted a robust 16% gain in 2024, ended December down over 2% and slipped 0.05% in early European trading. The pan-European STOXX 600 index fell 0.25% in its first session of the year.
In the U.S., stock futures signaled modest gains, with S&P 500 futures up 0.6% and Nasdaq futures advancing 0.8%. Conversely, China’s markets endured a rough start, with stocks logging their weakest New Year opening since 2016, driven by disappointing manufacturing data and anticipation for more policy support.
China’s Economic Outlook
China’s PMI data highlighted ongoing struggles in the manufacturing sector. However, President Xi Jinping’s pledge for proactive growth measures in 2025 has kept investors cautiously optimistic. Trump’s proposed tariffs on Chinese goods, potentially exceeding 60%, add a layer of uncertainty for China’s recovery.
“With external risks mounting and a fragile domestic economy, delays or missteps in stimulus measures could tip China into a severe downturn,” warned Yingrui Wang, economist at AXA Investment Managers.
Trump Administration and Tariff Concerns
Donald Trump, set to begin his second term as U.S. president on Jan. 20, is expected to implement aggressive trade policies, including tariffs. Analysts are closely watching the new Republican-majority Congress, which convenes Friday, for signals on tariff strategies.
Commodity and Currency Movements
- The U.S. dollar edged 0.1% lower against major currencies, while the euro ticked up 0.08% to $1.03615.
- Oil prices rose modestly, with Brent crude at $74.96 per barrel and WTI crude at $72.02.
- Gold extended its 2024 rally, trading 0.5% higher at $2,636 an ounce.
European Energy Markets Hit by Russian Gas Halt
Russian gas exports via Ukraine ceased on New Year’s Day, ending decades of dependence on Moscow’s energy supply. Gazprom cited Ukraine’s refusal to renew a transit agreement. As a result, the Dutch TTF benchmark gas contract surged to a 14-month high of €50.85/MWh.
Looking Ahead
As markets adjust to a new geopolitical and economic landscape, investors are bracing for a year shaped by inflation data, central bank actions, and shifting trade dynamics under the Trump administration.
