International equity markets started March strong, with European shares hitting record highs. However, US markets faced a challenging month, with major indices like the S&P 500 Index and the Nasdaq Composite Index experiencing declines, as at the time of writing. This pull-back sent both indices into ‘correction’ territory – defined as a 10% retreat from their most recent highs.
The sell-off in US equities was driven by investor concerns over the impact of new trade policies and tariffs. President Trump’s aggressive stance on trade, including the imposition of new tariffs, heightened fears of inflation and potential economic slowdown. Meanwhile, Asian markets showed mixed results, with Japan underperforming while China’s Shanghai Composite Index was one of the better-performing global share markets.
In New Zealand, the market faced significant headwinds, hitting its lowest point in nine months. The NZX 50 Index has declined over 7% since the start of the year, driven by a combination of global and domestic factors. As well as the broader sell-off on Wall Street, the market has been impacted by weaker-than-expected corporate earnings. Key sectors such as healthcare, aged care, and real estate saw notable declines, with Fisher & Paykel Healthcare and Ryman Healthcare among the major losers.
In contrast, bond markets benefitted from a rush into a safe-haven investments. This saw bond yields fall, and bond prices rise.