Wall Street Hits Record as Global Markets Shift

Despite Wall Street stocks lagging behind global markets, the S&P 500 still managed to reach a new record high. Investors are balancing tariff risks, Federal Reserve minutes, and global economic shifts.

U.S. Investors Eye Europe and China

A turbulent start to 2025 has seen investors diversifying portfolios, moving from U.S. stocks to European and Chinese tech markets.

• European stocks are gaining momentum, fueled by talks on Ukraine peace negotiations and Germany’s elections.
• Economic surprises favor Europe, with U.S. economic indicators slipping into negative territory.

Citi’s economic surprise index shows the eurozone at its most positive in eight months, while the U.S. index turns negative.

Trump’s Tariff Threats and Ukraine Tensions Shake Markets

President Donald Trump renewed threats to impose 25% tariffs on autos, pharmaceuticals, and semiconductors, sparking concerns over trade tensions.

Meanwhile, U.S. talks with Russia—excluding Ukraine—have raised geopolitical fears, fueling European defense spending and security concerns.

Market Reactions to Global Economic Trends

• European defense stocks surged amid discussions of increased EU military funding.
• German bund yields rose, tightening spreads with Italian and French bonds.
• The U.S. dollar strengthened, pushing gold prices to an all-time high of $2,946.75/oz.

Fed Minutes, Housing Data, and Interest Rate Decisions

Investors await the Federal Reserve’s meeting minutes and U.S. housing starts data, which could signal future monetary policy shifts.

• Canada and the UK reported higher-than-expected inflation, reinforcing expectations of slower rate cuts.
• New Zealand’s central bank cut rates by 50 basis points, signaling diverging global monetary policies.

Wall Street Outlook Amid Global Uncertainty

While Wall Street continues to climb, global economic shifts, trade tensions, and geopolitical risks are reshaping investment strategies.

Key Takeaway: Despite record highs, investors are bracing for volatility as economic and political developments unfold.