Periods of intense volatility due to uncertainty surrounding the Trump administration’s tariff policies, concern over the health of the US economy and signs that artificial intelligence stocks were losing momentum were experienced. Investor confidence was also impacted by fears the US will experience stagflation, which is a combination of high inflation, stagnant economic growth, and high unemployment.
Global trade tensions worsened in mid March after the Trump administration implemented 25% tariffs on steel and aluminium imports. At the end of the March, European share markets, which had rallied throughout much of the quarter, and US markets experienced increased volatility. This was because the US was implementing tariffs on imported cars and car parts and aggressive reciprocal tariffs on April 2—termed “Liberation Day” by President Trump.
Overall US shares posted their worst quarter in three years and global shares declined 1.8%^. Emerging markets however rose over the quarter gaining 2.9%*.
Locally, investor confidence was boosted in January as reports of slowing core inflation sparked optimism for a rate cut by the Reserve Bank of Australia (RBA). In February the RBA did reduce rates by 0.25% and this strengthened consumer confidence as inflation pressures eased somewhat and consumer outlook on the labour market and the economy improved. The RBA however was more cautious in March and kept rates at 4.35% as they continued to monitor emerging global political tensions and trade policies to gauge their potential impact on the Australian economy.
Australian shares, especially mining and gold related shares, benefited early in the quarter as investors sought safe-haven investments following increased volatility in the US market. The momentum didn’t last though as investors turned anxious and the Australian market began to mirror the losses in US markets. Australian shares ended the quarter down 2.9%#.
To see BUSSQ's investment returns for the financial year to 31 March 2025, visit our monthly investment performance page.
Early April market volatility
In the first week of April share markets around the world declined sharply following President Trump’s liberation day announcement of tariff increases that were higher and further reaching than expected. The US market was one of the worst hit with the S&P500 falling 20% and the NASDAQ100 falling 25%.
Markets have since recovered some ground but are expected to remain volatile while global trade tensions and economic uncertainty continues.
Periods of significant market volatility are difficult and we understand the stress and tension they can cause. For more information on what market volatility means for you and what BUSSQ is doing read our market volatility Q&A.
