US equity markets staged a relief rally on Friday, March 14, as dip buyers returned after a bruising market sell-off to multi-month lows. Risk appetite improved despite ongoing tariff risks, weak US data, and recession fears.
The Nasdaq Composite Index surged 2.61%, while the Dow and the S&P 500 advanced 1.65% and 2.13%, respectively.
On March 14, the University of Michigan Survey of Consumers drew interest amid speculation about a US recession. The Michigan Consumer Sentiment Index fell to 57.9 in March, down from 64.7 in February, signaling a possible pullback in consumer spending. A slowdown in consumer spending, which accounts for over 60% of GDP, could raise bets on multiple Fed rate cuts.
However, inflation expectations may complicate the Fed’s policy outlook. The Michigan Inflation Expectations Index climbed to 4.9% in March, up from 4.3% in February.
The CME FedWatch Tool reflected a jump in expectations for a Fed rate cut in June. The probability of a June rate cut increased from 77.1% on March 14 to 83% on March 17.
Asian Market Implications: Friday’s US market relief rally set the tone for the Monday, March 17 session
On March 17, China’s economy remained in focus, with housing data, retail sales, industrial production, and unemployment figures drawing interest. Key stats included:
Brian Tycangco, editor/analyst at Stansberry Research, remarked on the housing market trends, stating:
“Steady as she goes. China’s property market recovery gaining ground. This will be a tailwind for stocks in 2025.”
China’s data followed fresh stimulus pledges from Beijing, targeting the labor market and domestic consumption, bolstering demand for Hong Kong and Mainland China-listed stocks.
In Asia, the Hang Seng Index rallied 1.34% on Monday morning as investors reacted to Beijing’s stimulus news and China’s economic data.
Mainland China’s equity markets also posted morning gains. The CSI 300 and Shanghai Composite Index rose 0.09% and 0.42%, respectively. However, the upside was modest amid ongoing tariff concerns.
The Nikkei Index gained 1.13% on Monday morning as tech stocks tracked Friday’s US market rebound. Meanwhile, the USD/JPY pair held onto Friday’s 0.55% gain, rising 0.02% to 148.648, supporting export-focused stocks.
Notable movers included Softbank Group (9984) and Tokyo Electron (8035), which advanced by 2.22% and 2.93%, respectively.
Australia’s ASX 200 rose 0.68% on Monday morning, lifted by Wall Street’s strong Friday close.
Global markets remain sensitive to shifting economic and policy dynamics:
China’s stimulus efforts and innovation drive could help stabilize regional markets amid lingering tariff risks.
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With over 28 years of experience in the financial industry, Bob has worked with various global rating agencies and multinational banks. Currently he is covering currencies, commodities, alternative asset classes and global equities, focusing mostly on European and Asian markets.