Major factors affecting global markets in 1Q25 included the launch of DeepSeek and President Donald Trump’s trade policies. Chinese startup DeepSeek raised concerns on the amount of capital expenditure being poured into accelerated computing when the Generative AI (GenAI) chatbot matched the capabilities of leading language models, however, it was reportedly created at a much lower cost.

A particularly volatile March rounded out a bumpy 1Q25 for global equity markets, with the MSCI World Net Index returning -4.5% in US dollars (USD) in the month and -1.8% in the quarter (local currency returns of -5% in March and -2.7% in Q1).

This year has certainly been characterised by immense uncertainty in global markets. Global equities declined over the quarter, with the MSCI All Country World Index falling 1.2% and the S&P 500 declining by 4.3%. The primary reason for the downturn can be ascribed to a valuation multiple de-rating in the United States (US), driven by a confidence shock among global investors.