Congratulations on navigating one of the most volatile months we’ve seen in years. If there was one theme in April, it was uncertainty. Markets dislike the unknown—and that was evident as both stocks and bonds experienced sharp swings. An early-month escalation in global trade tariffs triggered a sell-off and sent volatility spiking to levels last seen during the 2008 financial crisis and the 2020 pandemic. However, sentiment improved later in April as the Trump administration walked back comments on the Fed and tariffs, and economic data showed resilience. By month-end, equities had recaptured most of their losses and key indicators pointed to an economy that’s bending but not breaking.
Key Highlights: Navigating April of 2025
- Economic Overview: Trade tensions and new tariffs rattled sentiment early in the month, but strong consumer demand, steady hiring, and easing inflation signaled continued economic resilience.
- Equities: Large-Cap stocks dropped over 20% from the high we saw in February (~14% from the beginning of April) on tariff fears before rebounding sharply; the S&P 500 finished the month nearly unchanged.
- Fixed Income: Treasury yields swung between panic lows and multi-year highs, with bond markets stabilizing as inflation came in cooler than expected.
- Looking Ahead: With uncertainty around future returns in stocks and bonds, uncorrelated and diversified alternative investments like infrastructure, private credit, and real estate may offer more stability and increased diversification through the uncertainty.
Economic Overview
Economic data in April showed a U.S. economy that remains resilient despite ongoing trade tensions and market volatility. While first-quarter GDP declined slightly, key indicators like consumer spending, jobless claims, and inflation trends suggest the underlying foundation remains solid.1 The Federal Reserve emphasized its commitment to price stability while acknowledging the uncertainty ahead. Markets are now pricing in potential rate cuts later in the year, signaling that the Fed may step in if growth slows further. Meanwhile, a temporary pause on new tariffs helped restore some confidence late in the month. Overall, the data suggests that while the path forward may be choppy, the economy remains strong going into all the unknowns.
Key Data Points:
- Q1 U.S. GDP: -0.3% annualized, but real private sector demand grew +3.0%.1
- Weekly jobless claims remained low, showing continued labor market strength. 1
- Headline CPI for March came in at 2.4% year-over-year, down from 2.8% in February. 1
- Core CPI (excluding food and energy) eased to 2.8%—its lowest since March 2021. 1
- Fed reiterated focus on anchoring inflation expectations while remaining flexible.
- 90-day pause on new U.S. tariffs helped ease market concerns late in April.
Equities
April was a wild month for stocks. The S&P 500 opened strong near record highs but quickly tumbled after the U.S. announced sweeping new tariffs on April 2. Within days, the index dropped more than 10%, marking one of the fastest corrections in modern history. That panic was followed by one of the biggest single-day rebounds ever, after President Trump announced a 90-day pause on the harshest tariffs. From there, markets stabilized, helped by steady earnings reports and signs of softening trade rhetoric. By month-end, the S&P 500 had nearly recovered its losses, closing just 0.7% below where it started. The key takeaway: volatility remains high, but resilient fundamentals and policy shifts could turn sentiment quickly.
Key Market Moves:
- The S&P 500 dropped from ~5650 to ~4835 (-14%) in early April amid tariff fears.
- April 4 marked the worst day for US large-cap stocks since 2020 with a nearly -6% decline. 2
- Just days later, the S&P 500 surged +9.5% on April 9—its biggest one-day gain since 2008.3
- The VIX “fear index” spiked above 50 before falling back below 25 by month-end.3
- Q1 earnings surprised to the upside, easing recession concerns and helping drive a late-month recovery.
Fixed Income
Bond markets were no less turbulent than equities in April. Treasury yields seesawed wildly as investors tried to interpret the economic fallout from tariffs and inflation data. Early in the month, panic selling in equities sparked a flight to safety, pushing the 10-year yield below 3.9%. But as inflation fears grew and bond auctions showed weak demand, yields spiked to 4.59%—the biggest weekly jump in yields since 2001.1 By the end of the month, yields had settled near where they began, as markets calmed and inflation data came in cooler than expected. The Federal Reserve’s flexible stance and solid investor demand helped restore balance.
Key Fixed Income Insights:
- The 10-year Treasury yield swung from ~3.9% to 4.59% and ended April near 4.16%.
- Treasury volatility spiked to its highest level since the pandemic, then quickly reversed.
- March inflation data released in April came in below expectations, easing rate fears.
- Market expectations grew for 2–3 Fed rate cuts later this year if inflation continues to ease.3
- After early concerns, demand for Treasuries rebounded strongly by month-end.
Looking Ahead
April is shaping up to be a pivotal month. Key policy and data releases could reset investor expectations and drive near-term market direction. Trade policy remains a major wildcard, with the April 2 tariff decisions potentially altering inflation dynamics and geopolitical tone. MApril 2025 will be remembered as a month when markets were tested by sudden shocks and yet demonstrated remarkable resilience. A cascade of tariff headlines sent stocks into a tailspin and drove extreme volatility across assets, but an equally swift policy response and solid economic underpinnings helped spark a recovery. Clients with diversified portfolios saw the benefit of holding steady through the storm: equities rebounded and fixed income provided ballast (despite interim swings). As we move into May, the key questions will be whether trade negotiations yield lasting truces, how quickly inflation pressures abate, and how the Federal Reserve navigates its next moves.
Looking ahead, with return forecasts for stocks, bonds, and cash remaining uncertain, investors should increasingly consider private market opportunities that are less correlated to traditional assets. Infrastructure, private credit, and real estate offer the potential to enhance yields while reducing portfolio volatility. These alternatives could provide attractive risk-adjusted returns—especially in a world where traditional asset classes may face headwinds.
We expect markets to remain sensitive to news on these fronts. Elevated volatility may persist, but such swings also create opportunities. Our strategy remains focused on discipline and balance: we continue to diversify globally, rebalance portfolios to maintain risk targets, and seek quality assets that can weather short-term storms. April’s lesson is clear—staying invested through volatility, with prudent risk management, is crucial when looking at long-term financial goals. Our team at Ceva Advisors is closely monitoring developments and stands ready to adjust allocations as conditions evolve, keeping your portfolio aligned with your objectives and the prevailing market climate.
1 Allen, Henry and Jim Reid. “April 2025 Performance Review.” Deutsche Bank Research, May 1, 2025.
2 “Target Allocation Monthly Commentary: April 2025.” BlackRock, May 1, 2025.
3 “Markets Daily: April 1 – April 30, 2025 Series.” Bloomberg, April 1 – April 30, 2025.
IMPORTANT DISCLOSURE: This article is produced by Ceva Capital LLC dba Ceva Advisors. The information contained in this report is informational and intended solely to provide educational content to our clients and other readers that we find relevant and interesting. Opinions expressed are just that, and are current only as of the data of publication Nothing in this document should be construed as investment advice; we provide advice on an individualized basis only after understanding your circumstances and needs. The information presented in this newsletter is based on reports from Deutsche Bank and Bloomberg’s ‘5 Things You Need to Know to Start Your Day’ series. Data provided comes from sources we believe are reliable, but accuracy is not guaranteed. Discussion of sectors and the performance of region-specific equities and bonds generally refers to market indices. We use the S&P 500 to represent US large-cap; the Willshire Small Cap to represent US small-cap; the MSCI ACWI ex US to represent international equities; the US 10-year Treasury Yield to represent US Treasuries; the ICE BofA European Government Bond Index to represent European bonds; the ICE BofA US Corporate Index Effective Yield to represent investment-grade bonds; the ICE BofA US High Yield Index Effective Yield to represent high-yield bonds. Indices are unmanaged, are not subject to investment management fees or transaction costs, and it is not possible to invest in an index. Index performance can provide general information about how a particular region or investment has performed, but does not provide information about the performance of Ceva’s client portfolios. Actual client performance may differ materially from the index performance discussed. Past performance is not a guarantee of future results. Financial planning is a tool that can help clients consider different current and future scenarios and construct portfolios designed to meet specific goals and address specific risks. Financial planning does not guarantee a positive outcome or prevent loss. It’s important to revisit financial plans and the underlying assumptions of those plans regularly, and to make adjustments as needed to respond to changing circumstances.
