In Q1 2025, Wall Street faced significant challenges, with the S&P 500 experiencing its fifth weekly loss in six weeks and the Nasdaq entering correction territory. European stocks outperformed US stocks, driven by increased defense investment, while Chinese stocks surged due to advancements in AI. The S&P 500 lagged behind the pan-European Stoxx 600 by a record 17 percentage points. The "Magnificent Seven" tech giants, which previously drove market gains, lost nearly $2 trillion in market cap, with Nvidia and Tesla experiencing significant declines. However, other major US companies outside this group performed well, as indicated by an ETF excluding these seven stocks showing gains.
Economic uncertainty benefited metals, with gold rising 17% for its best quarter since 1986, and copper reaching record highs due to tariff concerns. Looking ahead to Q2, investors face a busy start with a major tariff announcement and a jobs report on the horizon.
Key takeaways:
European stocks outperformed US stocks in Q1, with the pan-European Stoxx 600 outperforming the S&P 500 by almost 17 percentage points.
Chinese stocks have surged, with the MSCI China Index up more than 30% since the end of August, driven by advancements in AI.
The Magnificent Seven tech stocks have lost significant market cap in 2025, with Nvidia and Tesla experiencing notable declines.
Gold and copper prices have risen significantly due to economic uncertainty and tariff concerns, with gold having its best quarter since 1986.
