TL;DR

Moody’s downgrades U.S.; U.S.-China tariff truce lifts equities; China imposes new trade duties.

Highlights

• Moody’s downgraded U.S. sovereign debt to Aa1 from Aaa, removing the last major agency triple-A rating; Standard & Poor's 500 futures and Treasuries fell after hours.1
• U.S. and China agreed to a 90-day tariff truce, sharply reducing tariffs but keeping a 10% baseline; Standard & Poor's 500 gained 5.3% on the week.2
• Trump to notify 150 countries of new U.S. tariff rates in coming weeks, following recent tariff adjustments with China and the UK.3
• China imposed up to 74.9% anti-dumping duties on U.S., EU, Japan, and Taiwan POM copolymer imports for five years.15
• China resumed rare-earth magnet exports but issued no licenses to U.S. end-users; U.S. secured privileged access to Ukraine’s critical minerals.4
• UK surpassed China as the second-largest foreign holder of U.S. Treasuries in March; total foreign holdings reached a record $9.05 trillion.6
• China’s central bank added gold for a fifth month, bringing reserves to 73.77 million ounces; global central bank gold holdings now $2.1 trillion.7
• Egypt’s gas exports fell 92% year-over-year; U.S. oil rig count and WTI prices remain weak, signaling a possible U.S. shale plateau.8
• EU considering punitive tariffs on Russian imports after U.S. lawmakers propose 500% secondary tariffs; Russia launched a record drone barrage on Ukraine.1314
• Israel escalated military operations in Gaza and Yemen, intensifying regional risk and deepening Gaza’s humanitarian crisis.1011
• Brazil’s first bird flu outbreak on a commercial farm triggered 60-day poultry import bans from China, EU, and others.16

Commentary

Markets ended the week digesting Moody’s downgrade of U.S. sovereign debt, which stripped Treasuries of their last triple-A rating from a major agency. The move, driven by concerns over rising U.S. deficits and debt, triggered a late selloff in equity and Treasury futures. While Moody’s assigned a stable outlook, the downgrade highlights persistent fiscal headwinds and could incrementally raise U.S. borrowing costs, with potential spillover to global rates and risk sentiment.1

The U.S.-China 90-day tariff truce delivered a strong tailwind for equities, particularly tech and cyclicals, but the relief is likely to be temporary. The U.S. is preparing to notify 150 countries of new tariff rates,3 and China’s new anti-dumping duties on engineering plastics signal that trade tensions remain unresolved.15 China’s partial resumption of rare-earth magnet exports—while withholding licenses for U.S. end-users—keeps supply chain risks elevated. The U.S. move to secure privileged access to Ukrainian minerals underscores the strategic competition for critical resources.4

Commodities and energy markets face renewed supply-side uncertainty. Egypt’s gas export collapse and signs of a plateau in U.S. shale output could tighten global energy balances, even as WTI remains below $65.8 Central banks, led by China, continue to accumulate gold , reflecting ongoing diversification away from fiat reserves amid geopolitical and fiscal uncertainty.7 Meanwhile, Brazil’s bird flu outbreak and resulting import bans threaten to disrupt global poultry supply chains.16

Geopolitical risk remains high. Israel’s expanded operations in Gaza and Yemen,1011 Russia’s record drone attacks on Ukraine,13 and the EU’s consideration of new tariffs on Russian imports14 all add to market uncertainty. These developments may drive safe-haven demand for gold and select sovereign debt, while keeping energy, defense, and agricultural supply chains in focus.