April 2025 Market Outlook

Global risk assets fell sharply in March 2025 amid growing uncertainty over President Trump’s proposed tariffs. For the month, the S&P 500 declined by 5.8%, the Nasdaq Composite dropped 8.2%, and the MSCI ACWI Index slipped 4.1%.

In early April 2025, U.S. President Donald Trump moved forward with the “Liberation Day” tariffs, which turned out to be more extensive and far-reaching than most had expected. Trump not only complicated matters for other countries by using a tariff formula that magnified the impact of trade barriers imposed by U.S. partners, but he also enforced steep tariffs with unwavering resolve even in the face of retaliation, as demonstrated by his continued standoff with China.

Shortly before the new tariffs were set to take effect, Trump unexpectedly paused the policy he had announced earlier on social media. Following the initial announcement, a 10% tariff was slated to apply to all countries except China, Mexico, and Canada. Imports from China were to be hit with a steep 145% tariff, while Mexico and Canada would continue facing a 25% rate.

U.S. stocks have taken a significant hit. The S&P 500 had dropped roughly 12% over the previous four trading sessions. But when a 90-day pause was announced, reverting to a 10% blanket tariff for most countries, while maintaining China’s tariff at 145%, the index rebounded sharply, jumping 9.5%. In short, markets are on edge. That said, history shows that periods of extreme market volatility often present some of the most attractive long-term entry points for investors.

At its March meeting, the Federal Reserve opted to keep interest rates steady. While the central bank lowered its U.S. growth forecast for 2025 and raised its inflation projections, it maintained its projection for two rate cuts this year, unchanged from its December outlook. In its March 19 statement, the Fed acknowledged that “uncertainty around the economic outlook has increased,” yet struck an overall optimistic tone about the broader economy.

Spooked by the latest presidential tariff threats, investors have driven gold prices to a record-breaking $3,000 per ounce, marking a 9.3% month-over-month gain, and a 15% gain since the start of the year as investors flocked to safe-haven assets amid growing uncertainty around U.S. President Donald Trump’s policies.

This erratic approach to tariff policy has become one of the most perplexing aspects of the year—and possibly of Trump’s entire presidency. His unpredictable decision-making, especially his tendency to reverse course shortly after making public announcements, has made it increasingly difficult for investors to interpret market signals.

Tariffs, however, aren’t the only major policy tool in play. Trump is also weighing substantial tax cuts, which, if implemented, could deliver a short-term boost to equity markets.

With so many variables at play, the ultimate market impact remains highly uncertain. The convergence of trade policies, potential tax reforms, and global geopolitical tensions has created a complex and volatile environment where strategic agility is critical.

One key piece of advice: stay focused on your long-term financial goals and remain invested in a well-diversified portfolio designed to weather uncertainty. For Stability, diversifying across asset classes offers a critical buffer against market volatility. When tariffs or other shocks affect one market, exposure to other areas can help offset losses and maintain overall portfolio balance. Something our Real Estate Private Equity Funds are designed for.