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Financial markets are currently contending with a lot of uncertainty. We believe this could be the case for a while yet. While investors should primarily focus on their long-term goals rather than short-term market movements, we understand that it can be empowering to be in the know. Here's what our investment team has to say: 

There's an overwhelming amount of information to keep on top of about the current state of volatility.

Below we share what we're keeping a close eye on amidst the noise, and how this is feeding into the portfolio decisions we are making on behalf of our clients. 

We will be updating this page regularly with information that we believe provides useful context for the news headlines you're likely to be reading, and the movements you may be seeing in your portfolio.

It will be rolling commentary, with the newest update from our team at the top. 

Past performance and forecasts are not a reliable indicator of future performance. We do not provide investment advice in these updates. Always do your own research.

25.04.25

It is too early to read much into comments from the US Treasury that the trade standoff between the US and China might de-escalate, but perhaps it's a sign that relations may start to thaw.

The Nutmeg investment team has previously made mention of this Republican administration’s use of uncertainty. Specifically, our view is that it necessitates that investors do not take statements from the White House fully at face value, to which the last few days stand testimony.

We first made this comment shortly after the so-called 'Liberation Day' tariff announcements on 2 April. Only days later, the US government announced a 90-day pause on most reciprocal tariffs, with the notable exception of China. Within the past few days, signs have emerged that the US government could relax its tough stance on trade with China too.

US Treasury Secretary, Scott Bessent, commented on Wednesday that tariff rates between China and the US are “not sustainable”. Investors interpreted the statement as a move towards de-escalation, and the mood in US equities briefly lifted. However, the Treasury Secretary also commented that the final state of US tariffs would not be known until the third quarter of the year. China itself has asserted no negotiations have begun, and that no solution can be expected until the US revokes the "unilateral" tariffs targeting it. 

In a similar vein, within the past week, the US president has been deeply critical of the Federal Reserve Chair, Jerome Powell, before seeming to row back on the comments after they unnerved markets. 

So, while it appears there have been steps in the right direction this week, we expect a few more twists in this story yet. 

18.04.25

Over the last three weeks, 10-year US Treasuries – a key pillar of the bond markets – have seen as much as a 0.50% difference between their lowest and highest yield readings.

Typically, an asset class such as US Treasury bonds acts as a 'safe haven', where investors flock amid times of economic uncertainty. This can see the prices of lower risk bonds like these rise when equity prices are falling.

In recent weeks, against the volatile equity market environment, we have also seen bond yields and prices move around sharply. Investors have been grappling with the implications of tariffs for the direction of inflation and interest rates, key influences for the bond markets.

The quick change in the yield on the 10-year US Treasury mentioned above may not sound like a lot, but for what is regarded as a stable asset, it is noticeable. It can help to explain why portfolios invested in what would typically be regarded as lower risk investments have also seen higher-than-normal levels of volatility.

Yields are now back around the same level they were before the tariff-induced swings, and seem to be stabilising somewhat after the initial shock. We expect bonds to continue to play an important role in all but the highest risk multi-asset portfolios, as they have done for investors in previous periods of market turbulence.

13.04.25

The US has granted exclusions from the tariffs announced on 2 April for smartphones, computers and select electronics.

The 'reciprocal' tariffs, including the baseline tariff of 10% and the heightened levies on imports from China, have been waived on a broad array of electronic items, and backdated to 5 April. This offers some pause on concerns that technology prices for US importers could skyrocket, given China's major role in the production of electronics.

09.04.25

On 9 April, the US President announced a 90-day pause on higher tariffs for trading partners, other than China.

This means that the tariff paid by US importers on goods from most countries will be the baseline rate of 10%. This excludes China, where tensions with the US remain heightened. The pause has been welcomed with market gains, however the "end-game" is still to play out and is subject to uncertainty. 

Read more: How to handle volatility like a seasoned investor

08.04.25

The asset allocation of the Smart Alpha portfolios  on which J.P. Morgan Asset Management advises Nutmeg on the management of  was adjusted on 8 April 2025.

Portfolios' exposure to equities was reduced, in particular US equities. Some of this equity exposure was shifted into fixed income to hedge against a potential growth slowdown.

This reflects a growing caution regarding the US economic outlook, with the magnitude of the announcement of US tariffs being much higher than anticipated by the market, and far outstripping those promised during the election campaign. The bars on the right side of the chart below reflect the full extent of the tariff surprise, which markets have been reacting to.

Jon Sherman, Head of US Equities at J.P Morgan Asset Management, adds context to this chart, explaining on 9 April that ‘the magnitude of the “Liberation Day” tariffs announcement was much higher than anyone anticipated, and certainly higher than we thought in our US equity business.’

Read more from the J.P. Morgan Asset Management market insights team: US tariffs: what to do and what not to do, in light of tariff news

04.04.25

2 April saw the US' sweeping tariffs come into effect.

The wholesale nature of the tariff regime announced is more than almost all expectations, posing increased downside risks to economic and global trade activity. Confidence shocks are likely negative in the near term so we are now looking at a slightly lower growth and slightly higher inflation outlook than had been widely expected.

Our investment team made a number of portfolio adjustments on 4 April to reduce risk in Nutmeg's managed portfolios. These are based on the team's rigorous and ongoing analysis. To see full details of the trading activity relevant to your portfolio, please access the 'Discover' section of the app and see 'Trading Updates'.

Read more: US 'liberation day' tariffs: what they mean for investors

We started this page in April. Below we have included a summary of our views and decisions in the months leading up to this, informed by our analysis of the evolving macro-economic data and global financial and geopolitical announcements.

01.04.25

March saw US equity performance weaken significantly, while major stock markets in the UK and Europe showed resilience but still declined.

Tariff noise overshadowed significant economic events, including:

  • The UK Chancellor's Spring Statement, which highlighted the Office for Budget Responsibility's – the government's financial watchdog – warning of worsening economic growth
  • Germany's approval of a substantial infrastructure spending plan, with changes to debt rules for increased defence spending
  • Early signs of a possible resolution to the Ukraine conflict
  • Optimism about Japan's potential escape from deflation.

In the Fully Managed and Thematic Investing portfolios, Germany's fiscal boost from the infrastructure spending plan provided a tailwind to our equity holdings in European industrial companies. However, along with the broader European equity market, prices fell back in late March as investors became concerned about the potential for greater risk that could be coming with the looming tariff announcement.

Read more: Nutmeg investor update: April 2025

27.03.25

The US President has suggested that tariffs are a strategy to encourage goods production to move back to the US. The Nutmeg investment team is monitoring changing policy announcements carefully.

We believe that, while tariffs are a 'supply shock' (where the supply of goods/services is restricted artificially), the current threats, while unsettling, are likely to have a limited inflationary impact. This is due to the US' relatively low level of imports compared to peers.

We appreciate the uncertainty tariffs create for Federal Reserve policymakers, who may need to adjust interest rate strategies. 

While the global economy is expected to grow moderately, supporting US and global stock markets, extreme tariff measures could lead to adverse market conditions. 

11.03.25

Markets have been rattled by the US Republican administration's evolving rhetoric on tariffs.

Financial markets have been more unsettled in recent weeks, with US equities at the centre of the volatility. Investors’ uncertainty has risen, as it remains unclear which of the administration’s intentions will translate into action, and to what extent.

Although the recent weakness in the US market is noticeable, we believe that the long-term picture is still positive for risky assets. US equities had an especially strong year in 2024, with the S&P 500 up 25.8%. The US can’t always outperform every month, every quarter. The long-term view remains largely positive, despite price fluctuations, which are a reflection of a functioning market.

Importantly, Nutmeg portfolios are globally diversified – geographically and by asset class. This is done to limit the impact of volatility in certain regions on overall portfolio performance.

Read more: Market turbulence: Nutmeg's investment team reacts 

04.03.25

February saw varied performance in global financial markets, with US equities reaching new highs in the middle of the month. 

The Nutmeg investment team remains optimistic about the US economy based on ongoing evidence of strong manufacturing activity, healthy consumption, and a robust labour market.

We adjusted our portfolios by adding positions in the US financials sector, anticipating benefits from steady economic growth, elevated interest rates, and potential deregulation under the new Republican administration.

Additionally, we maintain a neutral stance on European stocks but favour specific sectors like industrials, driven by evidence of rising global trade and potential increases in European defence spending, while also preferring Nordic markets for their brighter macroeconomic outlook.

Read more: Nutmeg investor update: March 2025

04.02.25

In January, global equities saw gains, with UK equities performing particularly well. Delayed decisions on tariffs kept investors guessing: the start of what we expect to be a recurring theme of unpredictability.

We expect this to introduce a level of uncertainty in markets, which we anticipate will create regular opportunities for engaged investors. At Nutmeg, we aim to keep a long-term perspective and look beyond short-term 'noise' generated by unpredictable comments or actions. That said, the durable impact of proposed tariffs can’t be neglected, given the potential ramifications for the US and world economies.

Read more: Nutmeg investor update: February 2025

07.01.24

In December, there was a little cold water poured on investors' optimism by the Federal Reserve – the US central bank. 

Central banks have been cutting rates to help boost economic growth. However, inflation in the US has remained stubbornly above target. The Fed is concerned that if they cut rates too much too quickly, it could bring unwanted upward price pressures. In terms of the investment environment, we acknowledge that there are challenges and a degree of caution is warranted, with US equity valuations above historic averages. We could see increased market volatility. However, we remain optimistic about the broad investing landscape, and expect the corporate earnings picture to remain positive.

Read more: Nutmeg investor update: January 2025 

12.12.24

Our outlook for 2025: optimistic, but cautious about geopolitical uncertainty. 

We outline that a number of major planned political events, ongoing geopolitical conflicts, and a new Republican administration in the US could increase the potential for market volatility in 2025. 

We believe that the US economy is still robust relative to other geographies, while the UK also appears to be in relatively good shape. The possibility of tariffs at the levels currently proposed by the incoming US administration, and possible counter-tariffs by China, is likely to unsettle emerging markets overall. 

Read more: Our 2025 investment outlook

Risk warning   

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Past performance and forecasts are not a reliable indicator of future performance. We do not provide investment advice in this update. Always do your own research.