At the end of the first quarter of 2025, the U.S. financial markets recorded a marked volatility that negatively impacted the main world stock market indexes. The Nasdaq, the S&P 500 and the ACWI* closed March with returns of -8.21%, -5.75% and -4.15%, respectively, and accumulated declines of -10.42%, -4.59% and -1.69% for the year. These movements were influenced, in part, by statements made by Trump administration officials, who warned that the country was entering a "transition period", in response to the implementation of new tariff policies and labor cuts by the Department of Government Efficiency (DOGE).

In the commodities sector, the price of gold, which began March at around 2,857 dollars per ounce, surpassed the 3,100 barrier. Meanwhile, copper reached a historic high amid rumors about the possibility of the Trump administration imposing new tariffs on this metal.

The global outlook remains tense. Following the "Liberation Day" announcements on April 2, Donald Trump's administration surprised the world by imposing extremely high "reciprocal" tariffs on most countries, generating great uncertainty in the markets and triggering widespread global panic. This announcement resulted in losses approaching $5 trillion in U.S. stock markets in just two days, marking some of the most significant declines in history. Subsequently, on April 9, the president announced a 90-day temporary pause in negotiating such tariffs, with the exception of China, which had its tariff increased to 125%. This news boosted the S&P 500 by almost 9% on the same day.

The tension has been exacerbated by the Russia-Ukraine conflict where Trump has warned about the possibility of imposing tariffs of 25% to 50% on Russian oil buyers if Vladimir Putin hinders peace efforts.

At the global level, several events complement this complex picture. Germany has proposed a fiscal package of more than €1 trillion for defense and infrastructure, which could transform its economy and that of the European Union. This move responds to uncertainty over US security support by excluding defense spending above 1% of GDP from its debt limit. A €500 billion fund will also be created to modernize infrastructure over the next ten years. These actions will revive the German economy and strengthen its military apparatus, benefiting the entire Eurozone.

Moving on to other countries, in Japan, wage negotiations are solid and a possible interest rate hike is expected in the fall. In Canada, Mark Carney took office as prime minister on the eve of elections, while in China, the National People's Congress set a 5% growth target for 2025, accompanied by a plan to boost domestic consumption.

We continue to anticipate a lot of volatility in the short and medium term given the unpredictability of President Trump's decisions, but discipline, long-term vision and proper risk management are critical in uncertain times such as these.

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