During the month of May, all conventional wisdom went out the window.

This month began on a strong note, on the “Liberation Day” tariffs accounced by President Trump on April 2 had the impact of a thunderclap and markets collapsed. In the space of 3 days, the S&P500 lost 15%, the Nasdaq -16%, the Eurostoxx -14.5%, the NIKKEI -14%. By month end, with some talks of reprieve and reversals, investors' fear had diminished, and the NASDAQ, for example, was up 0.9%, which seemed unthinkable after April 2nd. But with heightened uncertainty, investors remain perplexed by what lies ahead, not excluding the possibility of a further downturn.

March 2025 began with a volatile yet cautious tone across global financial markets, influenced by several key geopolitical and economic factors. The month started with gains on European markets, particularly in France and Germany, driven by optimism around new investment initiatives aimed at modernizing infrastructure and upgrading defense capabilities in the wake of growing geopolitical risks and uncertainty surrounding the US commitment to NATO. However, these gains quickly dissipated as tariffs started to become effective, leading to a reversal in the positive momentum.

February started on a strong note for US financial markets, with an upward trend driven by strong earnings reports and investor optimism about the global economic outlook (principally US). It seemed like the US was prepared for another solid quarter, but that quickly shifted towards the end of February. A correction, caused by concerns over US trade policies, particularly the tariffs that the Trump administration was preparing to impose, led to a negative performance for the month.

The inconclusive, yet long held belief that markets become inefficient in January and easy money can be made could gain more believers this time around. The month ended at +2.93% for the S&P 500, largely above the January average, despite all the uncertainties surrounding the new US President and the various policies he has and will continue to implement.