March 2025
March saw the world’s geopolitical pulse quicken, as strategic tensions between the US and China deepened, instability simmered across the Middle East and conflicts over resource access flared in the Arctic and Indo-Pacific. Financial markets remained volatile, whipsawed by erratic central bank signals, surging and retreating energy prices, and intensifying regulatory pressure on the AI and tech sectors.
The chief drivers of market movement in March were the fears of sweeping US tariffs, mounting fears of a global recession, and a broad investor flight to safety. President Trump’s announcement of new “liberation day” tariffs on imports ranging from steel and aluminium to cars and fentanyl triggered a sharp downturn across global indices. The S&P 500 slipped into correction territory, with tech giants like Nvidia, Amazon, Tesla and Microsoft bearing the brunt of the sell-off.
Geopolitically, March was eventful. Trump’s blanket tariffs deepened trade friction, rattled global supply chains, and sent a chilling signal to markets already on edge. In Ukraine, the UK and France stepped forward to lead a “coalition of the willing,” promising Kyiv security guarantees and diplomatic support. Meanwhile, European Commission President Ursula von der Leyen unveiled “Readiness 2030” - an €800 billion defence initiative aimed at bolstering military autonomy across the bloc. In the Middle East, civilian protests erupted in Gaza, calling for an end to the war and criticising both Israeli bombardment and Hamas rule.
Most central banks were active throughout March, seeking to stabilise expectations amid an increasingly complicated backdrop. The ECB cut key rates by 25 basis points on 6 March, citing a softening inflation outlook. The PBOC pumped 800 billion yuan into the banking system via reverse repos to maintain liquidity, while Banxico cut rates by 50 basis points for the second month in a row as Mexican inflation cooled. While the Fed maintained the federal funds rate at 4.25% to 4.5%, citing ongoing economic uncertainties, including the impact of recent trade policies.
Global equities oscillated through the month, with regional divergences emerging. In the US, the S&P 500 lost 5.9% and had its worst quarter since 2022, while the Nasdaq dropped 8.4%. Tech bore the brunt of the sell-off. Trump’s tariff regime sent shockwaves through Wall Street, and Goldman Sachs responded by lowering its S&P 500 price target and slashing its GDP growth outlook to 1.5%. Investors rotated out of cyclicals and tech, and into precious metals and defensive names. In Europe, early-month optimism saw the FTSE 100 notch a record close of 8,871.31 on 3 March before falling back to close down 2.6%, while Germany’s DAX losses were more muted, down 1.7%. In Asia, Japan’s Nikkei 225 fell 4.1% and the Shanghai Composite Index was up 0.5% on renewed confidence and more supporting government policies.
Commodities surged in March, with gold once more stealing the spotlight. The precious metal closed at $3,155, up 10.8% for the month as investors hedged against inflation and geopolitical risk. Silver likewise was up 10.3%. Copper also caught a bid, up 28% YTD as demand surged amid front-loading of shipments ahead of expected tariffs. Oil remained volatile: OPEC+ announced production hikes for April, briefly pulling prices down, before tighter US sanctions on Iran and Russia pushed them back up. WTI ended the month at $71.5 and Brent $74.8 up 2.4% and 2.7% respectively. Agricultural commodities remained mixed, with wheat prices forecast to fall further in 2025 amid healthy global supply expectations.
Crypto markets were far from quiet. Bitcoin held between $80,000 and $90,000, consolidating after its earlier rally past $108,000, and closed marginally down 0.8%. Ethereum struggled, down 40% over the past three months amid competition from Solana and growing internal friction. Altcoins saw varied performance - XRP notably spiked 7.3% on ETF speculation. The standout moment came on 3 March, when President Trump unveiled plans for a US Strategic Crypto Reserve, naming BTC, ETH, XRP, SOL and ADA as strategic assets. The announcement sent prices briefly soaring before profit-taking set in. The broader theme was clear: digital assets are behaving more like mainstream financial instruments, with increasing correlation to traditional markets.