Market review - April 2025

Please see our glossary for terms used throughout the article.

April was a month of high drama for financial markets. Global stockmarkets initially declined sharply in response to US President Trump’s trade tariffs, before recovering much of their losses. The turmoil spilt over into bond markets, but by month-end, yields on 10-year German (Bunds) and UK government (Gilts) bonds were lower, while US Treasury yields were relatively unchanged (bond yields and prices move in opposite directions). The US dollar was a major casualty of President Trump’s erratic policymaking and ended the month sharply lower against other major currencies.

Markets were volatile from the outset. On 2 April, a date Trump called “Liberation Day”, the president announced tariffs on all the US’s trading partners and higher “reciprocal tariffs” on others, such as 20% on the European Union. The tariffs were higher than expected and as fears of a global trade war developed investors began to contemplate the likelihood of a US recession.

Calm temporarily returned to markets about a week later, after President Trump announced a 90-day suspension of the reciprocal tariffs for non-retaliating countries (thus excluding China). Share prices rallied in relief, with the S&P 500 Index climbing nearly 10% in a day.

Uncertainty persisted until sentiment started to turn more positive later in the month. After initially launching a scathing attack on the US Federal Reserve (Fed) Chair Jerome Powell, Trump said that he had “no intention” of firing him. He also indicated that he wanted to reach a deal with China.

So as the stress began to abate in the second half of April, markets including the S&P 500 Index, the DJ Stoxx 600 Index of leading European shares and the UK’s FTSE All-Share Index rose and were only slightly down by the end of the month. The Japanese stock market bucked the trend and posted gains for April.

In fixed income (bonds), US Treasury yields fell at the start of the month, on increased expectations that the Fed would be forced to cut interest rates in the face of recession. However, yields then rose as investors sought greater compensation for increased risks and were broadly unchanged by month-end. German bund yields and UK gilt yields fell. During the month, the European Central Bank cut rates by a quarter of a percentage point to 2.25%, in a widely expected move.

In commodities, the oil price slumped, reflecting investors’ concerns about a trade war and potential slower global growth. To make matters worse, OPEC+ (the expanded Organization of the Petroleum Exporting Countries) had announced plans at the start of April to boost production. Gold was the big winner amid the risk aversion and ended the month higher, having reached over US$ 3,500 per ounce during the month.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.

The views expressed in this article should not be taken as a recommendation, advice or forecast.