Key Highlights
- The S&P 500® was down 0.76% in April, bringing its YTD return to -5.31%.
- The Dow Jones Industrial Average® lost 3.17% for the month and was down 4.41% YTD.
- The S&P MidCap 400® decreased 2.32% for the month, bringing its YTD return to -8.63%.
- The S&P SmallCap 600® returned -4.28% in April and was down 13.19% YTD.
Market Snapshot
The market spent the month watching and reacting to short-term events in Washington, policy announcements and other changes, and it reacted strongly. The S&P 500 posted a decline of 0.76% (-0.68% with dividends) after March’s -5.75% (-5.63%), February’s -1.42% (-1.30%) and January’s broad 2.70% gain (2.78%). The three-month return turned negative, at -7.80%
(-7.50%), as the YTD return was -5.31% (-4.92%), with the one-year gain at 10.59% (12.10%); the 2024 gain was 23.31% (25.02%). April’s total return decline of 0.68% would have been a decline of 0.78% without the Magnificent 7, and the YTD 4.92% decline would have been a decline of 0.29% without them.
The S&P 500 fell for its third consecutive month, as the tariff policy changed numerous times, which added significant volatility to the market. The S&P 500 entered bear territory (off 20%) on an intraday basis (-21.35% low on April 7 of 4,835.04, and high on Feb. 19 at 6,147.43), but it never closed there (bull and bear classifications are based on closing prices). April posted gains for 13 of its 21 trading days, compared to 10 of 21 last month. Breadth decreased, as 168 issues were up and 331 were down, compared to March’s 154 up and 349 down, February’s 248 up and 255 down and January’s 355 up and 148 down; year-to-date, 198 issues were up and 305 were down. Trading increased 7% over March and was up 52% over April 2024.
For April, 5 of the 11 sectors increased, after 2 of the 11 gained last month, 6 of 11 gained in February and 10 of 11 gained in January. Information Technology did the best for the month, up 1.58% (down 11.51% YTD and up 20.21% from the end of 2023), and Energy did the worst, down 13.73% (-5.71% YTD and -3.53% from the 2023 close).
Target prices ticked down slightly, even as the market declined significantly, as the S&P 500’s one-year Street consensus target price declined 4.8% to 6,543, a 17.5% gain (22.4% last month) from the current price and down from last month’s 6,869 (6,905 the month before that). The Dow®’s target price also slightly declined, down 4.6%, to USD 46,810, a 15.1% gain (16.8% last month) from the current price (49,056, 49,391).
News on tariffs and their market impact (currencies, commodities, derivatives, equity, fixed income) was global and daily, as reactions to rumors, commentary and actions were at historically high levels (volume and volatility).
After the close on Wednesday, April 2, 2025 (with the S&P 500 at 5,670.79), Trump spoke at the White House Rose Garden, announcing reciprocal tariffs in what he declared “Liberation Day” for U.S. trade policy. Trump set a base 10% tariff on all imports to the U.S. Canada and Mexico were exempt from the 10% but were still subject to the 25% tariff on goods not covered by the United States-Mexico-Canada Agreement (USMCA). Trump then added higher rates for 60 specific countries based on a combination of their tariffs, VATs or government support. China’s tariff was 34% (resulting in some products being as high 79%), while the EU was 20%, Japan 24% and Vietnam 46%.
Few had expected the impact to be as massive as it was. While most saw the situation as a work (or negotiation) in progress, the flight to safety was quantifiable. U.S. markets opened lower on heavy trading and closed down 4.84%, as 95 issues gained and 407 fell, and the S&P 500 lost USD 2.33 trillion for the day. Global market decreases included France at -3.31%, Germany -3.01%, Japan -2.77% and Hong Kong -1.52%, with gold at -1.16%, Bitcoin -6.99% and the U.S. dollar lower against almost all currencies.
