Welcome back to your Weekly Market Update! Buckle up, because this past week, global financial markets threw us curveball after curveball—yet somehow managed to end broadly in the green across major indices. From stellar technology sector earnings and whispers of potential monetary easing to renewed trade optimism, there was a lot driving the action. However, if you peel back the layers of these headline gains, familiar worries about stubborn inflation and signs of slowing global growth are still very much present and warrant careful attention. Let’s unpack the week’s key market moves region by region and spotlight what’s coming next.

United States: Technology Sector Powers Markets Ahead Amid Softer Economic Data

The U.S. equity markets had a powerful and positive week:

• S&P 500: up 4.6%

• Nasdaq Composite: up 6.7% (leading the gains)

• Dow Jones Industrial Average: up 2.5%

The technology sector was the clear leader, with the S&P 500 tech sector jumping nearly 8%, largely fueled by stellar earnings reports from several tech giants. However, beneath this surface excitement, softer economic data emerged:

• The S&P Global Flash PMI (Purchasing Managers' Index) dipped to a 16-month low, primarily driven by weakness in the services sector.

• The University of Michigan consumer sentiment index declined for a fourth consecutive month, with concerns about inflation clearly lingering among households.

In short, while the technology sector soared, underlying economic data from more traditional sectors signaled a potential slowing of momentum in the broader U.S. economy.

Europe: Relief Rally for Equities Amid Fragile Economic Fundamentals

European equity markets also experienced a rally:

• STOXX Europe 600: up 2.77%

• The German DAX, French CAC 40, and UK FTSE 100 all posted strong gains.

The main driver for this European rally appeared to be an easing of trade tensions and a more optimistic global sentiment. However, underlying economic fundamentals remain a concern. Germany’s revised 2025 GDP forecast, projecting zero growth, raised alarms about the health of Europe's largest economy. The European Central Bank’s (ECB) chief economist maintained a cautious tone, acknowledging growing risks to the economic outlook. Meanwhile, the Eurozone PMI slipped to 50.1, barely above the 50-point contraction territory, indicating very little growth in business activity.

United Kingdom: Mixed Economic Signals Continue to Confuse the Outlook

The UK's FTSE 100 gained 1.69% during the week. There was a surprise jump in retail sales, which rose 0.4% month-over-month in March. However, the GfK consumer confidence index weakened again, highlighting persistent anxieties among UK consumers regarding the high cost of living and elevated energy prices.

Japan: Inflation Challenges Surface Despite Market Optimism

Japan’s Nikkei 225 and TOPIX equity indices rose by around 2.7–2.8%, largely driven by the prevailing global optimism. However, a key domestic concern emerged as Tokyo’s core CPI (Consumer Price Index) jumped to 3.4% year-over-year—the highest reading in two years. This rise in inflation complicates the Bank of Japan’s (BoJ) careful monetary policy balancing act. Meanwhile, new government support measures announced for industries hit by tariffs serve to underline the ongoing external pressures facing the Japanese economy.

China: Hopes for Economic Stimulus Continue to Build Among Investors

Chinese equity markets posted modest gains during the week:

• The Shanghai Composite and CSI 300 rose slightly.

• The Hang Seng Index in Hong Kong climbed 2.8%.

The key theme driving Chinese markets was the growing anticipation of more significant economic stimulus measures, following pledges from policymakers to support growth. However, concrete large-scale actions have yet to materialize, and the full economic drag from existing U.S. tariffs continues to loom large over the Chinese economy.

Looking Ahead: Key Economic Data and Events for April 28–May 2

United States:

• Tuesday: JOLTS job openings, S&P/Case-Shiller Home Prices, Consumer Confidence.

• Wednesday: Q1 GDP (first estimate), ADP private payrolls report.

• Thursday: PCE (Personal Consumption Expenditures) Price Index (a key inflation gauge for the Fed), ISM Manufacturing PMI, Pending Home Sales.

• Friday: Non-Farm Payrolls and Unemployment Rate (for April), Factory Orders.

Europe:

• Tuesday: Final Eurozone Consumer Confidence (for April).

• Wednesday: Preliminary Eurozone Q1 GDP, Flash CPI (inflation data for April).

• Friday: UK Nationwide House Prices (for April), German Retail Sales (for March).

Japan:

• Tuesday: Showa Day (markets closed for a public holiday).

• Wednesday: Preliminary Industrial Production (for March), Retail Sales (for March).

• Thursday: Bank of Japan Policy Meeting Summary.

• Friday: Unemployment Rate (for March), Consumer Confidence Index (for April).

China:

• Tuesday: Official Manufacturing and Non-Manufacturing PMI (for April).

• Wednesday: Caixin Manufacturing PMI (for April).

Conclusion: Market Rally Masks Underlying Economic Risks

This past week’s rally, particularly prominent in the technology sector, effectively masks growing underlying risks in the global economy. Whether it’s persistent inflation, slowing services activity in key economies, fragile European growth prospects, or ongoing uncertainty surrounding stimulus measures in China, the path forward for markets is filled with significant crosscurrents. A data-heavy week ahead, packed with important economic releases, could shift prevailing market narratives sharply.

Frequently Asked Questions (FAQs) on Last Week's Market Moves

1. What primarily fueled the strong rally in U.S. markets this past week?
   The rally was largely driven by stellar earnings reports from major technology companies, an easing of global trade tensions, and some market speculation regarding potential future monetary policy easing.

2. Is Europe’s economic situation genuinely improving based on recent data?
   Not definitively. Despite recent stock market rallies, underlying economic data such as Germany’s zero growth forecast for 2025 and a very weak Eurozone PMI reading signal continued fragility in the region's economy.

3. Why is the recent rise in inflation in Japan a concern for investors?
   Rising inflation in Japan complicates the Bank of Japan’s ability to maintain its long-standing ultra-loose monetary policy, potentially forcing it towards a less accommodative stance sooner than markets might expect.

4. What are investors currently awaiting from policymakers in China?
   Markets are hoping for concrete and substantial economic stimulus measures from Beijing to help offset the economic drag from U.S. tariffs and to support domestic growth.

5. Which U.S. economic data releases are most important to watch next week?
   The key U.S. economic indicators to watch will be the first estimate of Q1 GDP, the PCE inflation report (the Fed's preferred inflation measure), and April’s official jobs report (Non-Farm Payrolls).

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