Market Sentiment Tracker: Markets Watch China Rise as U.S. Sentiment Slips

The global macro picture is entering a phase of divergence that feels increasingly hard to ignore. The U.S., which has carried much of the post-COVID recovery narrative, is now showing subtle signs of fatigue — not in the hard data like jobs or headline growth just yet, but in the softer undercurrents: sentiment, pricing power, and business confidence. Inflation is easing, but so is consumer resilience. Meanwhile, China looks like it’s finally gaining traction. The credit impulse is firing, exports are rebounding, and consumer sentiment is improving — all signs that stimulus is beginning to stick. The big question now is whether this momentum can translate into a genuine demand recovery, especially in the face of deflationary pressure. Europe remains caught in the middle — industrial weakness is a clear drag, but consumer data is keeping things afloat. Heading into Q2, we could be looking at a world where China is the marginal growth engine again, the U.S. is slowing toward a soft-landing ceiling, and Europe muddles through, leaving risk assets increasingly dependent on the resilience of policy tailwinds and how quickly the global consumer re-engages. Cross-asset positioning will need to reflect that shift — less U.S.-centric, more nuanced, and alert to rotation, not collapse.