Monthly Market Update - April 2025

April is upon us, following an eventful first month of the spring season. President Trump is set to reveal broad reciprocal duties on all US trade partners on April 2, the most recent escalation of a trade war that will impact prices and disrupt global trading. A separate plan to impose 25% tariffs on all foreign-made vehicles will go into effect April 3. As we continue throughout April, the market will determine how sweeping those tariffs will be. Additionally, a 25% US tariff on imports of steel and aluminum from all countries took place last month, and the European Union has responded to metal duties with counter-tariffs on $28 billion in US goods from April. 

According to ADP’s March jobs report, companies added 155,000 jobs in March, an increase from 84,000 the previous month and better than Dow Jones’ forecast of 120,000 jobs.Additionally, consumer sentiment is worse than anticipated due to growing concerns over inflation. In the Survey of Consumers, the index of consumer expectations declined to 52.6, down 17.8% from a month earlier and 32% for the same period in 2024. Inflation fears appear to be driving this downturn, and respondents expect inflation in a year from now to run at a 5% rate, up 0.1 percentage point from the mid-month reading according to recent data.

April also marks National Financial Literacy Month, a time dedicated to the continued education and empowerment of financial health. The White House has recently released a Presidential Message on the importance of this anniversary, stating that research shows financial literacy leads to greater investments, higher retirement savings, and ultimately more household wealth.

Tax Day 2025 is nearing, and the deadline for paying taxes is midnight on April 15 in your associated time zone. If you file via mail, the IRS will consider your return filed on time if it is postmarked by the due date. The IRS has an online tool called ‘Where’s My Refund?’ that allows you to check on the status of your refund. Once your return is accepted, you can find out via this tool.

If you have any questions, concerns, or just want to say “hello,” contact our office. We’d be happy to review your financial plan and ensure your tax circumstances are appropriately aligned. Have a wonderful April!

Stocks

The volatility seen at the start of the year persisted in March, with equities continuing their slide seen in February. The market weakness remained driven by federal government policy and its potential to slow economic growth and/or raise prices. Markets thus far have been unable to ascertain clarity on tariff policy, and are still awaiting tax cuts and deregulation, which were also items on the President’s agenda. Investor sentiment continued to slow despite the fourth quarter earnings season wrapping up in a convincing fashion, as equity earnings rose versus the previous quarter. 

Sector Performance

Only one sector saw a positive performance in March - Energy - which rose 3.85% on the back of a rise in oil prices amid fresh geopolitical strife in the Middle East. This year’s sharp drop in equity prices has been propelled by a decline in the Technology and Consumer Discretionary sectors. Seven of the other nine sectors in the S&P 500 maintained positive returns for the year, even after a difficult March. The specific sector weakness is primarily due to elevated valuations after two consecutive years of performance that have buoyed the prices of the handful of stocks relative to their earnings strength. Every sector outside of Energy reported a loss in March amid fears of tariff uncertainty, the potential for a trade war to break out, and the possible impact of tariffs on consumer spending and inflation.

Bonds

Fixed-income assets continued their run in March as interest rates decreased, causing bond prices, which are inversely correlated, to rise. The fall in interest rates was mainly around concerns of slowing growth, which would cause the Federal Reserve to lower rates to stimulate growth. The yield on the two-year Treasury fell 10.6 basis points, but the yield on the ten-year Treasury held flat. Outside of falling interest rates, the risk premium added to bonds subject to more credit risk, known as the spread, increased. This premium increased because of concerns that an economic slowdown could hamper revenue growth and ultimately hurt the ability of companies to pay their debts.  

Economic Update

The economy continued to show resilience in March, supported by a strong labor market. Strong job growth of 155,000 is in line with pre-pandemic averages; the unemployment rate came in at 4.1%, below its historical average. The Institute for Supply Management (ISM) reported that the services and manufacturing sectors expanded simultaneously for the second consecutive reading, the first time in over two years, signaling broad-based economic momentum. However, inflation remained persistent, rising in February well above the lows seen in September 2024. Meanwhile, retail sales grew by 0.2% in February, and personal income rose by 0.8%, suggesting that consumers are making more and spending more. However, despite strong underlying economic data, consumer sentiment continues to deteriorate. According to the University of Michigan’s latest Survey of Consumers, dropped to a reading of 57.0, down 11.9% from the previous month. The sharp decline was driven largely by consumers’ concerns on how inflation and administrative policies will impact the economy in the months to come. 

first Astronaut with a disability cleared for space station mission 

This past month, the first astronaut with a disability has been cleared for a space station mission. John McFall, a British Paralympian and orthopedic surgeon, will be jet-setting from the running track to the International Space Station (ISS). Amazingly, McFall began to develop a passion for running after losing his right leg in a motorcycle accident at just 19 years old. Since then, he has spent the past few years working with the European Space Agency on a fascinating study known as “Fly!”, which takes a closer look at the possibility for para-astronauts to enter orbit. The study concluded late last year that it is possible, and the news propelled McFall in signing his dream six-month mission to the International Space Station. McFall believes this milestone for para-astronauts will be astronomical and create a cultural shift in the way society views space missions. McFall states, “One of the roles of an astronaut is to do important science in microgravity while working in space and it’s really my hope that if I get the chance to fly we realize what we do in space – the things we learn, the problems we solve, the technology that we develop – has a trickle-down effect and benefits people here on earth in wider society.”

The ”Fly!” project that served as the green-light for McFall will now move into a mission-ready phase. In this phase, researchers will examine the types of experiments he could conduct during his mission at the International Space Station and begin the journey to certify his prosthetic leg for space flight. This groundbreaking news opens new doors for the International Space Station and aspiring para-astronauts around the world. To read more about McFall’s miraculous story, read here. 

THOUGHT FOR THE MONTH

^{Index Definitions}

^{Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.}

^{Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.}

^{NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector.} 

^{S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.}

^{S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.}

^{S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.}

^{S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.}

^{S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.}

^{S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.}

^{S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.}

^{S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.}

^{S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.}

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