April 2025
Market Commentary
Some Dips, but No Derailment
Volatility was the name of the game for the U.S. stock market in April – with significant swings both up and down, and even some of the largest intraday moves investors have seen in recent memory. An apt metaphor would be a roller coaster ride - there were ups, downs, twists, and turns - and we got off the ride (safely) at the end of 21 trading days almost exactly where we started.
After dropping more than 11% in the first eight trading days of the month in response to the tariffs accounted by the Trump Administration on April 2, the Standard and Poor’s 500 Index was able to claw back much of that decline, and the benchmark of large-cap U.S. companies closed the month down 0.76%.
Source: Yahoo Finance, as of May 2, 2025 close
The see-sawing market in early April reflected investor reaction to the “Liberation Day” announcement of tariffs outlined by the Oval Office. Markets and investors were surprised at the tariff schedule announced by President Trump, with the proposed rates coming in much higher than anticipated.
That volatility spilled over from the U.S. equity markets into other areas of investment portfolios as well. In April, the traditionally stable U.S. Treasury markets saw yields on a 10-year bond oscillate wildly – briefly dipping below 4% then rising sharply above 4.5% before settling at 4.2% to end the month.
Gold continued to shine, outpacing equity markets with a 5.36% return for the month, continuing its run of exceptional year-to-date performance. On the international side, the MSCI World Index outpaced its U.S. counterpart by giving up less, losing 0.33% in the month.
Looking ahead, we are facing some cross-currents and mixed economic messages. On a positive note, the unemployment figures recently released came in much better than expected, with the U.S. economy adding 177,000 jobs in April. Conversely, U.S. Gross Domestic Product (GDP) for the first quarter of 2025 contracted 0.3% at an annualized rate, marking the first decline in three years.
Despite the stock market’s rebound, recovering almost all of the losses suffered immediately following the tariff announcement, uncertainty is still prevalent. Investors remain conflicted about the likelihood of the U.S. entering or avoiding a recession in the coming months, with the largest unknown being how Washington’s evolving trade policy will continue to impact the domestic economy and U.S. stock markets.
Going forward, in anticipation of a bumpy road ahead as investors face those headwinds and turbulence, we remain steadfast in our belief that the best course of action is to lean into diversification. Remaining invested in a portfolio that incorporates a wide range of asset classes and sub-classes allows investors to capitalize on the ballast of diversification and generates better risk-adjusted returns. Stay the course and stay on the roller coaster throughout all its ups and downs.
As always, we encourage you to reach out with questions or concerns about your plan. Your Cape Cod 5 team of advisors is here for you.
These facts and opinions are provided by the Cape Cod 5 Trust and Asset Management Department. The information presented has been compiled from sources believed to be reliable and accurate, but we do not warrant its accuracy or completeness and will not be liable for any loss or damage caused by reliance thereon. Investments are NOT A DEPOSIT, NOT FDIC INSURED, NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY, NOT GUARANTEED BY THE FINANCIAL INSTITUTION AND MAY GO DOWN IN VALUE.
