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ECONOMIC UPDATE
April 2025 | Monthly Economic Update
Source: FactSet
Tariff uncertainty, inflation, and concerns about a slowing economy once again weighed on markets in March. A globally diversified, moderate-risk 60/40 stock-bond portfolio fell -2.1% during the month but remains modestly positive for the year, helped by bonds and international equities.
Within equities, international stocks fared better as investors looked for opportunities elsewhere. The S&P 500 fell -5.6% in March and suffered its worst month since December 2022. The Magnificent Seven technology stocks, which drove markets higher over the last two years, weighed heavily on U.S. equity markets as investors sold off growth names. The index also experienced a 10% correction during the month from its last peak on February 19. As the U.S. market struggled, investors shifted their interest abroad. Developed international equities fared slightly better as Japanese stocks posted modest gains. China was the bright spot that continues to lead emerging market equities higher on AI enthusiasm.
Amid uncertainty in U.S. equities, defensive sectors such as utilities outperformed, while economically sensitive sectors like consumer discretionary faced the largest losses. Smaller companies struggled more, given their higher reliance on domestic policies.
U.S. bonds outperformed U.S. stocks for the month and the year as investors sought safety. Higher-quality bonds outperformed lower-quality bonds for the month as safety was the main concern.
Across other asset classes, gold, widely considered a safe haven investment, reached another record high and gained 18% for the year, the most since 1986.
Source: FactSet
The Monthly Riddle
The strangest creature you’ll ever find: Two eyes in front and many many more behind. What am I?
LAST MONTH’S RIDDLE: What English word retains the same pronunciation, even after you take away four of its five letters?
ANSWER: Queue
Tip of The Month
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