April 2025 Market Commentary

April 2025 will go down in history as the mic drop heard ‘round the world’ keeping investors on their toes – sometimes sprinting for the exits, other times chasing breakouts. Investor fear was at an all time high after Donald Trump’s fiery “Liberation Day” speech introduced sweeping global tariff proposals, targeting everything from EVs to European cheese. Cue market meltdown: the S&P 500 and TSX plunged for three straight days. From a technical perspective the volatility, or ‘fear’ index, was greater than levels recorded in 2022 (interest rate hikes), 2020 (pandemic), and the 08’/09’ (global financial crisis). During the chaos, both indices managed to hold key support levels, with the S&P 500 leveling off around 5,000 and the TSX settling in the 22,500 range, reminding traders that panic-selling is rarely a good look.

A couple days later investors found relief in a surprise announcement of a 90-day pause to allow for diplomatic negotiations. That “time-out” rallied the markets back, with the S&P finishing the month at 5,611.85 and the TSX clawing back to 24,841.68. Economic data offered a mixed backdrop, and a muted response amidst the geopolitical drama. In the U.S., March CPI came in at 3.5% year-over-year, hotter than the expected 3.4%, prompting the Fed to reiterate its cautious stance. Meanwhile, strong consumer earnings (minus a few retail laggards) and resilient job data helped market confidence. Core PCE, the Fed’s preferred inflation gauge, hit 2.9%, and March non-farm payrolls added 280,000 jobs, beating expectations, and suggesting the economy is still cruising along. In Canada, unemployment rose to 6.7% in March, while inflation fell to 2.3% from an eight-month high of 2.6% in the previous month. Consumers showed strong spending growth in March with retail receipts rising 0.7%, making up for a 0.4% decline in February. Tariff uncertainty forced the Bank of Canada to hold interest rates, despite the consensus of another 0.25% rate cut. Meanwhile, in a surprising twist the Canadian dollar strengthened against the US dollar ending April around 1.385 CAD/USD.

Commodities added its own mixed bag, with WTI crude dropping steadily throughout the month of April, beginning the month at $71.61 on April 1^st and closing at $58.20 on April 30^th. Gold hit a record $2,425/oz, as investors sought safety in the tariff tempest, while US copper futures reached $4.90 per pound by late April, buoyed by strong industrial demand and tight supply. To top it all off Canadians geared up for an unusually spicy federal election, with polling volatility giving Bay Street analysts a new excuse to drink extra coffee, while markets largely priced in another minority liberal government scenario – classic Canadian compromise. In short, April was a wild ride where charts looked great, data was decent, but a single speech managed to vaporize billions in market cap faster than you can say “tariff tantrum.” It turns out the most volatile asset class might just be… the microphone.

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