In March, policymakers acknowledged increased uncertainty regarding the economic outlook but maintained an expectation of a 50-basis-point reduction in interest rates for the year, consistent with their December forecast. GDP growth projections were revised downward from 2.1% to 1.7% for 2025, while 2026 and 2027 forecasts were adjusted to 1.8% (from 2%) and 1.8% (from 1.9%), respectively.

Global stock markets experienced a volatile month, shaped by a mix of macroeconomic shifts, policy uncertainties, and key economic releases. Below, we explore the factors, issues, and data points that influenced the U.S., European, Emerging Market, Japanese, Canadian, and Pacific ex-Japan stock markets last month.

The U.S. stock market experienced significant volatility last month, primarily due to trade policy uncertainty and mixed economic signals. The re-elected Trump administration’s aggressive tariff proposals, including potential hikes on imports from key trading partners such as China, Mexico, and Canada, have eroded investor confidence. Concerns about an impending trade war have particularly affected export-heavy sectors, such as manufacturing and technology, contributing to a decline of over 4% in the S&P 500 year-to-date.

In February 2025, global fixed-income markets fared well, though they faced considerable turbulence fueled by geopolitical tensions, shifts in monetary policy, and changing investor sentiment. A key incident contributing to this uncertainty was the contentious meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky on February 28.

International equities outperformed the U.S. in February, with Europe leading the way. Spain, the U.K., Germany, Hong Kong, and China gained significant ground while the U.S., Taiwan, Australia, Japan, and India lagged.

February witnessed notable sector rotation in the equity markets, with the Consumer Staples, Real Estate, Energy, and Health Care sectors experiencing growth, while Consumer Discretionary, Information Technology, Industrials, and Communication Services faced declines. The month began amid disappointing macroeconomic indicators that dampened investor confidence, highlighted by a significant drop in the University of Michigan’s Consumer Sentiment Index.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity & equity-related fixed-income markets. The model improved in January & entered February with a fully invested allocation recommendation. If our models shift to bearish levels, we will reduce exposure to fixed-income sectors with high correlations to equities.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) improved in January and entered February with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) improved in January and entered February with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity and equity-related fixed-income markets. The model held steady in December and entered January with a fully invested allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady in December and entered January with a fully invested equity allocation recommendation. We will raise cash if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) held steady in December and entered January with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model held steady in November and entered December with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity and equity-related fixed-income markets. The model held steady in November and entered December with a fully invested allocation recommendation. We will reduce duration and risk if our models shift to bearish levels (below 40% for two consecutive days).

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model (Figure 1) held steady in November and entered December with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of October but entered November with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of October but entered November with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model declined toward the end of October but entered November with a fully invested equity allocation recommendation. If our models shift to bearish levels (below 40% for two consecutive days), we will raise cash.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model improved toward the end of September and entered October with a fully invested equity allocation recommendation.

The Catastrophic Stop model combines time-tested, objective indicators designed to identify high-risk periods for the equity market. The model improved toward the end of September and entered October with a fully invested equity allocation recommendation.