USA

U.S. macro data during the last week reinforced a stagflation-leaning narrative. The latest official labor-market reading showed initial jobless claims rose to 210,000 for the week ended March 21, while the 4-week average edged down to 210,500, so layoffs still looked low but no longer improving. The latest official GDP estimate on hand still showed the economy slowed sharply in Q4 2025, with real GDP growth at just 0.7% annualized, and January PCE inflation was still running at 2.8% year over year, with core PCE at 3.1%; notably, BEA’s February personal income/PCE release that had originally been due on March 27 was postponed to April 9, leaving markets without a fresh inflation reset. At the same time, S&P Global’s flash March PMI signaled softer activity and firmer price pressure: the U.S. composite output index fell to 51.4, employment slipped into contraction, and input-cost inflation accelerated as the Middle East war kept oil prices elevated. That macro mix, together with renewed concern that the Fed may have less room to ease, hit risk appetite: by March 27 the S&P 500 had fallen about 2.1% for the week, the Nasdaq about 3.2%, and the Dow about 0.9%. Tech and consumer-discretionary names led the decline, while energy outperformed as crude surged; Carnival’s profit-warning-driven selloff was one of the notable company-specific drags late in the week.

Europe

Europe’s last week was defined by a tension between still-positive official macro data and worsening energy-risk sentiment. Eurostat confirmed euro-area inflation rose to 1.9% in February from 1.7% in January, while revised Q4 2025 GDP growth came in at 0.2% quarter on quarter and employment growth at 0.2%, showing the region was still expanding but only modestly. Business surveys softened: the flash euro-area composite PMI fell to 50.5 in March, with services nearly stalling at 50.1 even as manufacturing improved to 51.4, suggesting higher energy costs were eroding demand while also lifting input-cost inflation. In the UK, February CPI stayed sticky at 3.0%, with services inflation still elevated, which reinforced concern that a prolonged oil shock could keep European policy rates higher for longer. Equity performance reflected that split. The STOXX Europe 600 still managed a small weekly gain of roughly 0.4%, but that masked sharper weakness in the major national benchmarks: the FTSE 100 slipped about 1.0%, the DAX 40 about 3.4%, the CAC 40 about 2.1%, and the IBEX 35 about 1.6%. Energy-linked stocks held up relatively well, but rate-sensitive and cyclically exposed sectors lagged as markets priced slower growth, higher imported inflation and lingering uncertainty around the Middle East conflict; Reuters also highlighted mixed corporate news including weakness around H&M/Next and a positive late-week readout from AstraZeneca.

Japan

Japan’s market moved in two directions at once: domestic inflation looked a bit less alarming in the latest official price data, but the war-driven oil shock and a weak yen kept investors worried about imported inflation and the Bank of Japan’s next step. Official Japanese data showed nationwide CPI rose 1.3% year over year in February, and the latest official unemployment rate was 2.7% in January, while Q4 2025 real GDP grew 0.3% quarter on quarter. Reuters reported Tokyo core inflation for February slowed to 1.8%, below the BOJ’s 2% target, but that relief was offset by the yen’s weakness and rising fuel costs. Meanwhile, the flash March S&P Global Japan PMI still showed expansion, with the composite at 52.5, though growth slowed from prior months. Equity markets were therefore highly volatile: Reuters footage showed the Nikkei plunged at the start of the week, but bargain-hunting and occasional hopes of de-escalation helped stabilize trading afterward. Because Japan was closed on March 20, the weekly comparison is best taken versus March 19: by March 27, the Nikkei 225 was roughly flat to slightly lower, down about 0.2%, while the broader TOPIX was up about 1.1%. In other words, Japan underperformed sharply early in the week on oil-shock fears, but domestic breadth held up better than headline sentiment suggested, helped by the value-heavy composition of TOPIX versus the more growth- and exporter-sensitive Nikkei.

China

China’s macro backdrop looked firmer than market sentiment. Official NBS data showed 2025 GDP grew 5.0%, Q4 GDP rose 4.5% year over year, CPI increased 0.8% year over year in the first two months of 2026, industrial production rose 6.3% in January-February, fixed-asset investment increased 1.8%, and industrial profits jumped 15.2% in the first two months. But the latest official February PMI still pointed to soft internal demand: manufacturing stayed in contraction at 49.0, with new orders weak and non-manufacturing also subdued. That is why better hard data did not fully translate into stronger equity performance. Mainland and Hong Kong stocks got a lift late in the week from the industrial-profits release and reports that regulators may ease some bank shareholder restrictions, but broader risk appetite remained capped by Middle East tensions and the possibility that higher energy prices could squeeze margins and demand. For the week, the Shanghai Composite fell about 1.1% and the Hang Seng about 1.3%; Friday’s rebound only trimmed, rather than erased, those losses. The takeaway is that China entered the week with better domestic data momentum than most major regions, but investors still treated that strength as fragile because the external oil shock and still-soft PMI picture threatened to blunt the recovery.