Monthly Market Report – April 2025

Trump’s ‘Liberation Day’ sparks market volatility in April, followed by a full recovery in the second half of the month

In the early sessions of April, markets saw a strong surge in volatility, with sharp downward movements. Volatility indicators reached levels not seen since March 2020 during the COVID-19 downturn. On April 2nd, dubbed “Liberation Day” by Trump, new reciprocal tariffs were announced by the U.S. Rather than isolated measures, Trump introduced very high tariffs to offset the U.S. trade deficit region by region. Some Asian countries faced tariffs close to 50%.

Markets reacted negatively to the increased tariff pressure. The S&P-500 dropped -10.53% in two sessions, hitting a low of 4,835 points. From the February 2025 highs, the index had fallen -18.90% by April 8th.

U.S. fixed income acted as a safe haven, with the 10-year yield dropping to 3.88% on April 4. But selling pressure accelerated, and yields climbed to 4.45% just three sessions later.

The stock market declines and high U.S. yields prompted Trump to adjust his tariff policy. On April 9th, he announced a 90-day delay, leading to a +9.52% rebound in the S&P-500, the third-best session in history and the highest by volume.

The rest of the month saw a clear shift in Trump’s narrative, with more conciliatory tones toward China. Combined with greater bond market stability, this allowed markets to recover most of the losses.

The ECB cut rates for a third time in 2025, lowering them by 25 bps to 2.25%. Markets expect two more cuts this year.

European bonds performed well, with price gains across the curve. The German 10Y yield ended April at 2.44%, down from 2.74%.

The USD continued weakening, reaching an EUR/USD exchange rate of 1.157, a -11.77% drop in 2025.

WTI oil dropped -18.56% due to increased OPEC production and slower global growth. Gold rose +5.29%, hitting new all-time highs at $3,500/oz due to the weak dollar, Chinese demand, and market volatility.

Informe Mensual de Mercados - Abril 2025Descarga

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