The week in 60 seconds

  • Tariff shock → risk-off Friday. Markets sold off after a threat of steep new U.S. tariffs on China; the move hit tech, trade-sensitive names and small banks, and flipped the weekly tone negative.
  • Oil down, gold up. Brent fell to multi-month lows on easing risk premia; gold extended its record-breaking run as investors sought insurance.
  • Data fog into earnings. With parts of the U.S. data flow disrupted, investors turned to upcoming bank earnings for clearer macro signals.

Scoreboard

  • Equities:
    • S&P 500: WTD ↓ — risk-off into the close; YTD ↑ after a strong 2025 rally.
    • STOXX 600: WTD ~flat to ↓ late-week as U.S. headlines bled into Europe; YTD ↑.
    • FTSE 100: WTD ↓ after setting records the prior week; YTD ↑ and near highs.
  • Government bonds (10-yr):
    • UK gilts / U.S. Treasuries: Yields drifted lower late-week as risk assets wobbled. (Read-through from risk-off session.)
  • FX:
    • USD (broad): Firmed into risk-off; GBP softened on the day alongside European equities. (Wrap references.)
  • Commodities:
    • Brent crude: WTD ↓; five-month lows on geopolitics easing and supply headlines.
    • Gold: WTD ↑; probed ~$4,000/oz and logged another weekly gain.

What drove the moves

  1. Trade risk repricing: A fresh tariff threat re-ignited worries about global growth and supply chains, pressuring cyclicals and high-beta tech.
  2. Energy deflation pulse: Oil slid on ceasefire/supply developments, easing inflation fears but weighing on energy equities.
  3. Data uncertainty: With parts of the U.S. stats pipeline impaired, investors looked ahead to bank earnings as the next macro proxy.

Winners & losers

  • Winners:
    • Gold & select precious-metals plays on safe-haven demand.
  • Losers:
    • Semis/AI-linked tech and trade-sensitive cyclicals on tariff risk; regional banks also weakened.
    • Energy equities trailed with crude at multi-month lows.

Flows & sentiment

  • Tone: Friday’s broad sell-off and a stronger USD indicate a risk-off skew into the weekend; volatility picked up as the rally “paused.”
  • Our Risk-On/Off score:−1 (Risk-Off)
    • VIX / equity drawdown: risk picked up into Friday (−1).
    • HY vs IG / breadth: cyclicals and high-beta underperformed (−1).
    • USD ↑ / Oil ↓ / Gold ↑: classic defensive mix (−1).
    • Curve/yields: modest duration bid into risk-off (0 to +1). (Qualitative from wraps.)

Read-through: Hedge sensitivity rose; we keep equity beta near neutral and favour quality/liquidity until tariff noise clears.

UK corner

  • Equities: After last week’s record high, the FTSE 100 faded mid-week and into Friday with global risk-off; banks and some domestics underperformed on specific headlines.
  • Energy & consumers: Cheaper crude is a tailwind for UK consumers/transport, but a headwind for energy heavyweights in the index mix.