Volatility returned across fixed income markets last week as soft economic data, rising inflation expectations, and looming U.S. tariffs forced central banks into cautious mode — with rate expectations shifting, credit spreads widening, and high yield flashing early signs of stress.

Investors grab gold, Trump unleashes foreign auto tariffs, and the top AI sites. Each week, the Syz investment team takes you through the last seven days in seven charts.

U.S. stock indexes declined during the week, largely driven by weakness in IT and communication services sectors, while value stocks outperformed growth shares for the 6th consecutive week. Several new tariff announcements—including a 25% levy on all non-U.S.-made automobiles—as well as concerns around a broader economic slowdown and weakening consumer sentiment weighed on stocks. Adding to these concerns, the core PCE price index—the Fed’s preferred measure of inflation—rose 0.4% in February, up from January’s reading of 0.3%. On a year-over-year basis, the core PCE rose 2.8%, remaining well above the Fed’s long-term inflation target of 2%. The data release appeared to help drive stocks lower on Friday to finish the week near their worst levels. U.S. Treasuries were little changed as yields were volatile.

Amid dovish signals from the Fed and an expected SNB rate cut, bond markets diverged —European yields surged on fiscal expansion, Japanese long bonds hit historic highs, and EM resilience was tested by political and inflationary shocks.

The Fed holds rates, the Turkish lira tumbles, investors ditch the US for Europe. Each week, the Syz investment team takes you through the last seven days in seven charts.

U.S. stocks closed the week higher, with most indexes snapping multi-week declines. Major indices rebounded on Friday after President Donald Trump said there would be some “flexibility” with tariffs. However, he maintained that the tariffs implemented at the April 2 deadline will be reciprocal, saying all countries that have tariffs on U.S. goods will be charged. The Dow Jones Industrial Average was the best weekly performer, advancing 1.2% while the technology-heavy Nasdaq Composite was the worst-performing index during the week. Value outperformed growth for the fifth consecutive week, bringing its total year-to-date outperformance to 897 basis points.

The US Federal Reserve held its target range for the Fed Funds rate unchanged yesterday, as widely expected, and the SNB -- one last cut, likely done in a highly uncertain environment.

Rising policy uncertainty is shaking up global fixed income markets—U.S. high-yield spreads surpass Europe for the first time since 2021, German yields surge on fiscal expansion, and central banks face tough choices amid inflation risks and slowing growth

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A rally on Friday couldn’t spare US stocks from weekly losses. The Dow fell roughly 3.1% for its worst week since March 2023. The S&P 500 and the Nasdaq both dropped more than 2% and posted their fourth consecutive losing week. Ongoing uncertainty surrounding trade policy seemed to drive much of the negative sentiment as new tariff announcements continued throughout the week. Growth concerns and increasing recession fears—which were amplified by comments from President Trump regarding a “period of transition” for the U.S. economy—also weighed on sentiment during the week.