By Brian Byrnes, Head of Personal Finance at Moneybox

 

What’s going on?

Markets are entering a volatile week as investors grapple with a mix of strong economic data, corporate earnings, and geopolitical shocks stemming from Trump’s newly announced tariffs.

The tariffs—targeting key imports from several major economies—have injected additional uncertainty into the market, contributing to heightened volatility across sectors.

 

Here’s what happened last week

Last Wednesday, US President Trump announced ‘reciprocal tariffs’ on US trading partners. These included a 10% baseline tariff on all goods imported into the US, with many countries facing significantly higher tariffs when exporting to the US.

Over the weekend, investors and markets continued to assess the likely impact of the tariffs. Several countries including China have already announced retaliatory tariffs on imports of US goods with the EU likely to announce such tariffs this week.

This has sparked fears of an all out trade war which would negatively impact the revenues and therefore share prices of global businesses.

 

Monday 7 April, markets continue to fall

Asian markets fell significantly as countries were particularly targeted by the US tariffs. European markets followed suit opening significantly lower this morning, as did the FTSE 100 in the UK.

The FTSE 100 was at a one-year low, putting its value at the same level as a year ago, having grown healthily over the past few years. The S&P 500 opened over 4% down, echoing sentiments from Asia and Europe.

 

So, what can investors do?

This can all be very scary for our money and investments. Nobody likes checking their investments and seeing falls like we are seeing at the moment. It also doesn’t help that nobody can tell you exactly what comes next in the short term.

What we can say with absolute certainty is that markets have been through volatility like this before; it’s a feature of investing markets, not a bug. While the tariff news that precipitated these falls feels abnormal, so did the coronavirus crisis that sparked the last market falls of this size. Markets recovered then and have done from every similar crisis in the past.

In the meantime, the best thing to do with your investments is to keep reflecting on your time horizon for investing. The reason that time horizon is so vitally important when it comes to investing is that it lets you wait out volatility just like this.

It’s not easy, and more volatility will likely come as the world reacts to these tariffs and potential trade deals are cut. But the more you focus on the long term, the easier it will be to navigate the day to day noise.

Now – here are the key events in the market this week.

 

Coming up this week

Monday, 7 April

  • Eurozone Sentix Investor Confidence (Apr): a gauge of Eurozone investor sentiment amid uncertainty.
  • Eurozone Retail Sales (MoM) (Feb): an indicator of consumer spending, vital for gauging economic recovery.
  • Japan Current Account (Feb): offers insights into Japan’s trade balance, influencing broader currency dynamics.

Tuesday, 8 April

  • Eurozone ECB De Guindos Speech: a talk by a European Central Bank official explaining current economic policies and outlook.
  • UK BOE Bailey speech: highlights the Bank of England’s stance in light of persistent inflation and tariff pressures.
  • US FOMC minutes: provides insight into the Fed’s latest policy deliberations and potential future rate paths.

Wednesday, April 9

  • UK BOE Pill speech: a speech by a Bank of England official discussing the current economic conditions in the UK.
  • Eurozone ECB Cipollone speech: a presentation by a European Central Bank member outlining their views on economic policy and challenges.
  • US Fed’s Goolsbee speech: remarks from a US Federal Reserve official that shed light on the state of the US economy.

Thursday, April 10

  • China CPI (YoY) (Mar): a report showing how the prices of everyday goods have changed compared to last year, indicating inflation levels.
  • US CPI (MoM) (Mar): a report showing how the prices of everyday goods have changed compared to last year, indicating inflation levels.
  • US Initial Jobless Claims: a weekly report that tells how many new claims for unemployment benefits were filed, reflecting the health of the job market.

Friday, 11 April

  • UK Gross Domestic Product (MoM) (Feb): provides additional clarity on the pace of UK economic growth.
  • UK Manufacturing Production (MoM) (Feb): a report showing changes in factory output in the UK during February, indicating industrial activity.
  • US Michigan Consumer Inflation Expectation (Apr): a survey that captures how consumers in Michigan expect prices to change in the near future, reflecting their inflation outlook.

 

Fund closures

Here are upcoming fund closures for this week. The funds listed will be closed for dealing on that day, and buys and sells will be executed on the next working day.

  • Thursday 10 April, Royal London Emerging Markets Shares

 

What you might’ve missed last week

Global: The markets experienced notable swings – notably on Friday 4 April – as investors reacted to Trump’s tariffs, which have disrupted supply chains and raised concerns over global trade stability.

US: Despite a steady PCE inflation rate around 2.8%, tariff-related uncertainties added pressure on sectors reliant on international trade, contributing to broader market volatility.

UK: Economic data showed that while consumer spending remains robust, inflation has edged higher partly due to costlier imports, intensifying the debate over future monetary policy moves. The FTSE 100 finished last week down 6.15% – eyes are on the week ahead to see if it’ll continue its downward trend.

 

Why it matters

Trump’s tariffs have become a significant wildcard in the market equation. They are not only affecting profit margins and cost structures for companies but also amplifying market volatility as investors weigh the broader economic impact.

The US non-farm payrolls report on April 11 is particularly critical; strong job growth would support the current Fed stance, whereas any signs of weakness, coupled with tariff pressures, might force a re-evaluation of future rate cuts.

Similarly, UK economic data will be under scrutiny as investors attempt to understand the extent to which external trade frictions are influencing domestic economic performance. With earnings season underway, companies will need to navigate these challenges while investors remain vigilant about the potential for sustained volatility.

 

Capital at risk. All investing should be long term. The value of your investments can go up and down, and you may get back less than you invest.

We do not offer personal financial advice or make specific recommendations based on your individual circumstances. If needed, seek independent financial advice before making decisions regarding your financial goals.