Euronext has released its latest report, the Capital Markets Update, offering a data-driven overview of current trends in equity markets and investor sentiment since the beginning of 2025.
Impact of recent global developments on European equity markets
The beginning of 2025 has been a volatile period for issuers and investors as markets continue to adjust to ongoing geopolitical and macroeconomic developments.
Euronext Capital Markets Update
Euronext's report shows an increase in market volatility broadly consistent with historical patterns observed during periods of macroeconomic stress. The current environment appears to be driven by a combination of forced derisking and elevated macroeconomic uncertainty. While this phase may feel pronounced, historical precedent – including episodes such as the COVID-19 market response – suggests that such conditions tend to normalise once initial adjustments are absorbed.
Key insights
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Volatility trends: Equity markets are facing significant volatility, with the VIX averaging 31 last week (14-20 April) — well above the 5-year norm of 19 — after peaking at 52 in early April. This level, while below those of past crises (COVID-19: 82, Ukraine war: 36, inflation fears: 34), still reflects elevated stress. Historically, the VIX returned to normal within 1.5 to 8.5 months post-crisis. Current spikes are triggering forced selling, especially on large-cap stocks.
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Market impact of recent US tariffs: The latest tariff announcements have triggered a sharp increase in trading volumes across Euronext markets in early April, particularly impacting large-cap stocks, while activity in mid- and small-caps remained largely stable. The third week of April saw a return to more normal levels, reflecting a stabilising global market environment during a shortened trading week.
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Sector performance and market rotation: Since the announcement of new US trade tariffs, Euronext markets have shown selective resilience in April, with Real Estate and Consumer Staples standing out in positive territory despite global trade tensions. While some sectors—particularly Energy, Telecoms and Financials—faced pressure due to their exposure to global trade and interest rates, others such as Healthcare and Utilities demonstrated relative stability. Cyclical segments like Tech and Consumer Discretionary experienced only modest pullbacks. Encouragingly, European indices remained resilient last week, supported by strong corporate earnings and renewed optimism in Asian markets regarding trade prospects.
For more information, we invite you to download the report.
Should you have any queries, please contact the Euronext team.