April in review

April was marked by volatility as the announcement of sweeping US tariffs triggered a global sell-off. President Trump's introduction of a new 10% baseline tariff – rising to as much as 145% on selected Chinese imports – sparked fears of a global trade war and an abrupt repricing of recession risk. Market volatility surged, with implied measures of equity risk reaching multi-year highs. Concerns deepened after the US Federal Reserve signalled its intention to keep inflation expectations anchored. However, sentiment improved mid-month after a 90-day delay on many retaliatory tariffs, softer rhetoric from President Trump, and signs that US policymakers remained committed to institutional stability. Meanwhile, US macro data, including jobless claims and PMIs, remained resilient, helping to contain fears of an imminent downturn.

Global equities delivered a small positive total return, with emerging markets outperforming developed markets. US equities were volatile, falling more than 10% over two days early in the month before staging a sharp rebound to close April down just 0.7%. The Magnificent 7 led the late-month recovery. Emerging markets equities rose modestly, supported by selective tariff exemptions and US dollar weakness, although Chinese markets declined on escalating trade tensions with the US and a deceleration of domestic economic activity.

Source: Bloomberg as at 30 April 2025.