Key Points:
• US stocks had a wild ride in April after bigger than expected tariff announcements from the President.
• International stocks provided global investors with some stabilization as they continue to perform better than the US.
• Bond investors saw another month of positive returns for investment grade fixed income.
The aggressive tariff announcements from the Trump Administration turned out to be more than the market was expecting and resulted in heightened volatility in April. Stocks declined by over 11% to start the month and wavered by the hour on tari updates. Worries about tari impacts and how companies will plan future operations and investments rattled investor forecasts. A 90-day reciprocal tari pause was announced on April 9th , which sent the S&P500 up 9.5%. This was the single best day for the index in over 15 years. For the month, the Dow Jones Industrial Average lost 3.1%, the S&P500 lost 0.7% and the NASDAQ gained 0.9%. Energy stocks (-13.7%) were hit the hardest during the month as economists increased their probability of a slowdown in the global economy. After being the worst sector in March, technology stocks were the best performer, gaining 1.6%. Small cap stocks lost over 2% while growth outperformed value across all market capitalizations.
International equities remained a bright spot for 2025. The MSCI EAFE Index gained 4.6% for the month and is up 11.8% for the year. European and developed Asian markets continue to see new inflows as the US Dollar fell in value during April. Emerging markets have been choppy with investors selling Chinese equities (-4.3%) but finding opportunities in Latin America (+6.9%). The world is anxiously waiting to see how global trade will look in the coming quarters. Globalization is not over but will probably look significantly di erent moving forward. Trade deals with individual countries may start to be announced over the coming months, with the US-China relationship being the most complex.
Bond yields had dramatic movements during the month as volatility in the markets soared. The 10-Year Treasury yield saw wild swings as investors grappled with risk-o sentiment, potentially higher inflation, growing deficits, weaking US Dollar etc. Overall, the Bloomberg US Aggregate Bond Index gained 0.4% in April and is up 3.2% for the year. Credit spreads widened during the month and long-dated bonds fell. High yield bonds are now trailing the investment grade bond indices as investors worry if the combination of tari s and dramatic reductions in government spending will slow US growth and potentially result in a recession.
• US stocks had a wild ride in April after bigger than expected tariff announcements from the President.
• International stocks provided global investors with some stabilization as they continue to perform better than the US.
• Bond investors saw another month of positive returns for investment grade fixed income.
The aggressive tariff announcements from the Trump Administration turned out to be more than the market was expecting and resulted in heightened volatility in April. Stocks declined by over 11% to start the month and wavered by the hour on tari updates. Worries about tari impacts and how companies will plan future operations and investments rattled investor forecasts. A 90-day reciprocal tari pause was announced on April 9th , which sent the S&P500 up 9.5%. This was the single best day for the index in over 15 years. For the month, the Dow Jones Industrial Average lost 3.1%, the S&P500 lost 0.7% and the NASDAQ gained 0.9%. Energy stocks (-13.7%) were hit the hardest during the month as economists increased their probability of a slowdown in the global economy. After being the worst sector in March, technology stocks were the best performer, gaining 1.6%. Small cap stocks lost over 2% while growth outperformed value across all market capitalizations.
International equities remained a bright spot for 2025. The MSCI EAFE Index gained 4.6% for the month and is up 11.8% for the year. European and developed Asian markets continue to see new inflows as the US Dollar fell in value during April. Emerging markets have been choppy with investors selling Chinese equities (-4.3%) but finding opportunities in Latin America (+6.9%). The world is anxiously waiting to see how global trade will look in the coming quarters. Globalization is not over but will probably look significantly di erent moving forward. Trade deals with individual countries may start to be announced over the coming months, with the US-China relationship being the most complex.
Bond yields had dramatic movements during the month as volatility in the markets soared. The 10-Year Treasury yield saw wild swings as investors grappled with risk-o sentiment, potentially higher inflation, growing deficits, weaking US Dollar etc. Overall, the Bloomberg US Aggregate Bond Index gained 0.4% in April and is up 3.2% for the year. Credit spreads widened during the month and long-dated bonds fell. High yield bonds are now trailing the investment grade bond indices as investors worry if the combination of tari s and dramatic reductions in government spending will slow US growth and potentially result in a recession.
Sources: Morningstar Direct, Wall Street Journal, Capital Group, T.Rowe Price