Sabco® Investment's Monthly Market Report - March, 2025

Sabco® Investment's Monthly Market Report - March, 2025

March 2025 was marked by heightened volatility across global financial markets, driven by escalating trade tensions, shifting monetary policies, and divergent regional performances. While U.S. equities faced significant headwinds, international markets demonstrated relative resilience.​

In the United States, major stock indices experienced notable declines. The S&P 500 fell by 5.75%, bringing its year-to-date loss to 4.59%. The Dow Jones Industrial Average decreased by 4.20% in March, resulting in a 1.28% decline for the first quarter. Mid-cap and small-cap stocks underperformed, with the S&P MidCap 400 and S&P SmallCap 600 indices dropping 5.68% and 6.36%, respectively, in March. These declines were largely attributed to uncertainties surrounding President Trump's tariff policies and concerns over rising inflation.

International equities fared better. The MSCI EAFE Index, representing developed markets outside the U.S. and Canada, declined modestly by 0.4% in March but remained up 6.9% year-to-date. Emerging markets also showed resilience, with the MSCI Emerging Markets Index gaining 0.6% for the month.​

In fixed income markets, U.S. Treasury yields exhibited mixed movements. The 10-year Treasury yield remained unchanged in March, while the 2-year and 5-year yields decreased by 11 and 7 basis points, respectively. The Bloomberg U.S. Treasury Index posted a total return of 0.23% for the month and 2.92% for the first quarter . However, corporate bonds faced challenges, with high-yield spreads widening due to concerns over corporate earnings and increased market volatility.​

Commodities experienced divergent trends. Gold prices surged, surpassing $3,000 per ounce for the first time, driven by investor demand for safe-haven assets amid geopolitical uncertainties and economic concerns . Conversely, oil prices declined, with West Texas Intermediate (WTI) crude falling to around $60 per barrel by mid-April, reflecting fears of a global economic slowdown and increased supply from OPEC+ producers.

The U.S. dollar weakened significantly, declining by 9% against a basket of major currencies year-to-date. This depreciation raised concerns about economic growth and borrowing costs, further contributing to market volatility.​

In summary, March 2025 was characterized by significant market turbulence, with U.S. equities under pressure due to trade policy uncertainties and inflation concerns, while international markets displayed relative strength. Fixed income markets provided modest returns, and commodities presented mixed results, underscoring the importance of diversification in navigating the complex global financial landscape.