February has been a volatile month, mostly thanks to the sweeping and immediate impact of the new Trump administration’s policies, from aggressive trade tariffs to dramatic federal government restructuring and geopolitical interventions, including progress toward resolving the Russia-Ukraine and Israel-Gaza conflicts. The US has pivoted its security focus toward China, pushing Europe to take greater responsibility for its own defense, prompting a surge in European defense spending. Financial markets have struggled with volatility; US equities, particularly tech stocks, have suffered amid trade war fears, while European and Chinese markets have outperformed due to defense investments and China’s AI-driven recovery.

Interest rates have fallen, but central banks may be cautious about further cuts given fiscal stimulus from defense spending and trade-related inflationary pressures. There is heightened uncertainty in global markets and diversification is increasingly important to navigate safely what could be a constructive but volatile 2025.