The technology‑heavy Nasdaq slipped into correction territory last week as the sell‑off in US equities extended for a fifth consecutive week. The index is now down more than -10.0% from its October peak, with last week’s –3.2% decline (in dollar terms) marking another sharp setback for growth‑oriented names. Sentiment remains fragile, dominated by concerns that the escalating conflict in the Middle East, and the associated surge in oil prices, could reignite inflationary pressures and prompt a more cautious stance from the Federal Reserve. The broader S&P 500 has also fallen for five straight weeks, with growth stocks materially underperforming value peers since the start of 2026. Bond markets have offered little respite with yields rising meaningfully across the curve, leaving the traditional equity‑bond diversification benefit weakened as correlations have climbed. Investors continue to grapple with an uncertain geopolitical backdrop and the possibility that higher energy costs could complicate the near‑term policy outlook.

European equity markets were comparatively subdued last week, with the MSCI Europe ex‑UK index edging +0.2% higher (in euros). Losses in Germany were offset by steadier gains across France and Italy, helping the region hold up better than the more volatile US and Asian markets. In the UK, the FTSE 100 delivered a modest +0.5% return, supported by its defensive and internationally exposed constituents, while the more domestically focused FTSE 250 fell –1.7%, reflecting a softer backdrop for UK‑centric earnings. Asian trading was notably more unsettled. Both Korea and Japan experienced sharp intra‑week swings, though the Nikkei 225 ultimately finished broadly flat. Commentary from Prime Minister Sanae Takaichi on bolstering Japan’s response to the unfolding energy shock underscored the country’s vulnerability to supply disruptions in the Gulf. Meanwhile, in China, sentiment remained fragile, with the Shanghai Composite declining –1.1% (in renminbi), rounding off a generally cautious week for regional equity markets.

Volatility was also a defining feature across commodity markets as traders reacted to shifting signals from the US administration regarding the conflict in the Middle East. Oil prices held firmly above the $100 threshold, with Brent ending the week broadly flat. Pressure eased temporarily after President Trump indicated that strikes on Iranian energy infrastructure would be paused for ten days, though market scepticism over the durability of any ceasefire meant that dips in crude were short‑lived. Gold, meanwhile, continued to lose ground. The precious metal fell -1.3% over the week to $4,528 an ounce, extending its recent decline. Despite its traditional role as a safe‑haven asset, liquidity considerations have increasingly dictated price action in recent weeks.

SJP Approved: 30/03/2026

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