In April, market volatility spiked as US stocks sharply pulled back in the wake of the administration’s “Liberation Day” tariff announcement to begin the month. Building concerns over inflation and increasing recession chances caused stocks to pull back early in the month, with a swift drop stock prices that hadn’t been seen since the pandemic. However, a week later, the administration softened its approach by announcing a 90-day pause on tariffs and excluding a range of products from them. Stocks then surged, posting one of the largest single-day gains in market history. Inflation came in cooler than expected, unemployment remained steady, and the number of jobs added to the economy exceeded expectations. Corporate earnings for the first quarter have been solid overall, though the outlook remains very uncertain amid the tariff variability. US stocks ended the month down slightly despite the turbulence.
International stocks continued their strong run, posting stellar gains over the month. Easing global trade tensions, strong corporate earnings, and favorable economic conditions – including interest rate cuts and fiscal stimulus abroad – helped fuel the gains.
On the fixed income side, bond yields spiked early in the month due to tariff announcements and weaker demand for U.S. debt. However, yields then declined and bonds posted strong gains later in the month on the tariff pause and investors’ expectations for several rate cuts from the Federal Reserve later in the year.
GDP growth for the first quarter was negative for the first time since 2022 as imports surged in anticipation of tariffs. Looking ahead, future updates on inflation, the labor market, and economic growth will be in focus as investors assess the impact of the administration’s trade policies on the economy.
| Index Performance | |||
| US Stocks (Russell 3000) | |||
| International Stocks (FTSE AW ex US) | |||
| US Bond Mkt. (BBgBarc Int. Gov/Cred) | |||
| Cash (ICE BofA ML 3-Mo T-Bill) |