April 2025 proved to be an extremely turbulent month for global financial markets, marked by sharp instability driven by the escalation of the U.S.–China trade war. The announcement by President Donald Trump on April 2 of a new round of tariffs—referred to as “Liberation Day”—triggered a wave of panic selling across markets, with sharp moves in equities, bonds, currencies, and commodities.

Equities: A Volatile Month Between Sell-Offs and Technical Rebounds

Following a dramatic start, with the S&P 500 plunging 10.5% in just two days and the Nasdaq 100 entering bear market territory, equities staged a partial recovery in the second half of the month. This rebound was supported by a temporary rollback of tariffs by the White House (excluding China) and strong quarterly earnings from major U.S. tech firms—most notably Microsoft, Meta, Alphabet, and Amazon.

Despite the recovery, the month closed with mixed performances:

  • S&P 500: -1.1%
  • Dow Jones: -3.65%
  • Nasdaq Composite: -0.02%

In Europe, market performance was similarly mixed:

  • DAX (Germany): -0.19%, supported by solid earnings
  • CAC 40 (France): -3.60%, weighed down by luxury and industrial sectors
  • FTSE 100 (UK): -1.62%, pressured by profit-taking and domestic economic weakness

In Asia, Japan’s Nikkei gained 1.2% thanks to renewed investor optimism, while China’s CSI 300 fell 3%, dragged down by domestic slowdown and persistent tensions with the U.S.

Fixed Income: Unstable Yield Curves, Duration Risk in Focus

In the bond markets, April saw a divergence between long-term U.S. and European yields. The U.S. 10-year Treasury yield rose from 4.22% to 4.31%, driven by heavy selling, while the German Bund yield declined from 2.69% to 2.52%, reflecting a “risk-off” sentiment in Europe.

Rising U.S. funding needs, combined with concerns that foreign investors may scale back their exposure to U.S. debt, added upward pressure on yields. In this environment, we favor maturities under three years, while avoiding excessive exposure to the long end of the curve and to high yield segments, which are particularly vulnerable during a global economic slowdown.

Commodities: Gold Hits Record High, Volatility Persists

As global uncertainty surged, gold reached a new all-time high of $3,425 per ounce on April 22, before pulling back to $3,288 by month-end, reflecting a temporary easing of risk aversion. Despite near-term volatility, gold remains a strategic safe haven asset in portfolios.

Elsewhere in commodities, price weakness was evident: falling oil and broader commodity prices signal deteriorating global growth prospects.

Outlook and Strategic Considerations

Trade tensions have added to already elevated macroeconomic uncertainty. The U.S. economy is showing signs of slowing, with GDP slightly contracting and industrial data remaining soft. While China has responded with symmetrical measures, it has yet to implement major stimulus policies to counteract the slowdown. In Europe, the ECB cut rates by 25 basis points, while the Fed held steady, though pressure is building for a potential easing cycle in the months ahead.

Overall, April demonstrated just how sensitive markets remain to geopolitical dynamics and political communication—especially when that communication is erratic. In this environment, we believe it is essential to maintain a prudent, liquid, and well-diversified investment strategy, avoiding overexposure to risky or illiquid assets. Active and flexible portfolio management will be key in navigating the months ahead, identifying opportunities in a landscape defined by high volatility and rapid shifts.