Weekly Market Performance — April 11, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of April 7, 2025. Stocks surged back into positive territory in their best week since 2023, thanks to a Wednesday spike following a delay in U.S. tariffs. The bond market also faced elevated volatility with Treasury yields moving sharply higher as securities sold off across the curve. Commodities broadly ended higher with gold setting fresh record highs, while oil prices edged lower.

Index Performance

U.S. and International Equities

U.S. Equities: Major U.S. averages closed a volatile week in positive territory following wild swings, in both directions, over the last five days. The tech- and growth-heavy Nasdaq outperformed its major index peers following recent underperformance, while the S&P 500 and the Dow Jones Industrial Average both recorded a solid week-to-date advance.

After a brutal sell-off at the turn of the quarter, elevated volatility continued to create another tumultuous week for capital markets. Stocks whipsawed Monday morning after soaring on false reports that suggested a tariff delay before reversing their gains and returning to the red following a denial by the White House. Investors monitored headlines out of Washington indicating trade talks might be around the corner, sniffing for clues that the U.S. is not entering a full-blown trade war. Equities faced another day of wild swings on Tuesday following an announcement of additional levies on Chinese goods, before storming back into positive territory Wednesday to snap a four-day losing streak following President Trump’s decision to delay tariffs for 90 days (with the exception of China). Massive gains from Wall Street’s best day since 2008 held stocks above the week-to-date flatline before resuming their slide lower on Thursday, before bouncing back on Friday as markets grappled with cooling inflation data and tariff-fueled inflation and economic fears.

Meanwhile, attention turned to the unofficial start to first quarter earnings season, with big banks leading off reports on Friday morning. Names including JPMorgan Chase (JPM), Wells Fargo (WFC), and Morgan Stanley (MS) topped estimates, although executive leadership broadly noted economic turbulence. While the numbers kicked off earnings season on a positive note, market chatter continues to surround earnings uncertainty and an increasing number of companies potentially pulling 2025 guidance.

International Equities: European equities remained below the flatline despite briefly touching positive territory on Thursday. While tariff headlines drove stocks over the last five days (including the European Union’s (EU) counter-tariff delay), local dynamics focused on the European Central Bank’s (ECB) rate cutting path ahead of next week’s policy decision. Rate cut bets fluctuated this week, moving lower by week’s end with markets expecting two cuts this year after concluding Trump’s 90-day tariff reprieve will likely have little impact on the central bank’s decision. Elsewhere, the macro calendar remained relatively light, although the U.K. outperformed its European peers on the week after a Friday boost from U.K. Office of National Statistics data indicating the economy expanded 0.5% in February, topping forecasts for a 0.1% expansion.

Asian markets sealed their third consecutive week of declines. Trade developments dominated headlines as Beijing and Washington continued to toss levies back-and-forth across the Pacific. Hong Kong and mainland China suffered notable losses after U.S. levies reached 145% by week’s end before stocks trimmed weekly losses following a 125% retaliatory tariff from Chinese authorities on Friday. Taiwan faced some of the worst selling as the ongoing semiconductor sell-off continued, while South Korea also ended lower with falling tech shares in play. Japan ended slightly lower thanks to a Wednesday surge, despite facing downside pressure from a stronger yen.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded lower this week following an action-packed week across fixed income markets. The rate-sensitive two-year yield traded 26 basis points (0.26%) higher, while the 10-year yield traded 45 (0.45%) basis points higher.

U.S. Treasury yields ended the week broadly higher, steadily rising from Monday morning lows. Sticky inflation, a patient Fed, foreign buyer boycotts, hedge fund deleveraging, rebalancing out of bonds into cash, and an illiquid Treasury market all helped push Treasury yields higher this week. Adding to those concerns was an extremely poor three-year Treasury auction raising fears about buyers boycotting Treasury securities due to ongoing tariff/trade wars. However, Wednesday’s 10-year and Thursday’s 30-year Treasury auctions were both incredibly well received with robust demand from both domestic and foreign buyers. As it relates to Monday’s auction, Monday is when the Treasury volatility really began in earnest, particularly after the “fake news” story about a 90-day pause in tariff implementation. After that tweet and the subsequent rebuttal from the White House, the 10-year Treasury yield, which was lower by roughly 0.13%, jumped higher by 0.33% in a matter of minutes. That sharp sell-off happened before the 3-year auction, so the price action most assuredly scared buyers away and, as such, we would argue the poor auction was not due to a buyer strike. But that’s just splitting hairs since there’s still a lot of anxiety in the Treasury market with the MOVE Index still elevated and a “sell first ask questions later” feel to this market. In a normal market environment, two exceptionally strong auctions would be a catalyst for more price appreciation (lower yields) but we are far from a normal market for now. But ultimately, this too shall end and, we believe, the Treasury market will go back to being a haven market, especially if economic conditions worsen to the point the Fed would need to cut more than what is expected.

Commodities and Currencies: The Bloomberg Commodities Index gained ground this week, erasing a 3% drop on the back of late week gains. West Texas Intermediate (WTI) crude oil rallied on Wednesday following the U.S. tariff delay and a larger-than-expected draw on gasoline and distillate inventories, according to the latest EIA report. However, oil prices ended lower as the escalation in the trade war between the U.S. and China continued to weigh on global growth expectations, leading the market to focus on weak fundamentals for oil and rising supply. Gold prices rallied to fresh all-time highs as investors moved to haven assets amid the U.S.-China tariff hikes, also supported by a sharp drop in the dollar on Thursday and Friday. In addition to trade tensions, the greenback faced strong downside pressure as major peers including the yen and euro strengthened Thursday and Friday; although the dollar did bounce off session lows on Friday following remarks from Federal Reserve officials.

Economic Weekly Roundup

Fed Minutes and Trump Announcements. The March Federal Open Market Committee (FOMC) Minutes were heavily focused on the effects of higher tariffs, which were referenced eighteen times as policy makers warned of uncertainty around the magnitude and persistence of such effects. Despite Wednesday afternoon’s release of minutes taken during the latest FOMC meeting, investors were more focused on the President’s announcement that tariffs are paused for 90 days on non-retaliating countries. China is not one of those countries. Fed officials are concerned about the downbeat sentiment of both consumers and businesses, which could be a harbinger of much slower economic growth, irrespective of future trade policy. Many foreign central banks eased policy during the intermeeting period, including the Bank of Canada, the Bank of England, Bank of Mexico, and the European Central Bank. Accommodative policy across the globe impacts the U.S. dollar. Financing from capital markets continued to be broadly available for large-to-midsize businesses and municipalities. By contrast, credit conditions for small businesses remained moderately tight. This is something to monitor, given the greater impact that tariffs have on small businesses.

Market volatility could remain elevated, despite the 90-day pause on tariffs for non-retaliating countries. Hard data from the early part of the year suggests the economy is slowing, irrespective of trade policy. Clearly, the removal of extreme tariff rates will ease some of the concern about the outlook for the economy. The Fed will remain committed to both sides of their mandate and will not aggressively cut rates when inflation is running hot.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: New York Fed One-Year Inflation Expectations (Mar)

• Tuesday: Empire Manufacturing (Apr), Import Price Index (Mar), Export Price Index (Mar)

• Wednesday: MBA Mortgage Applications (Apr 11), Retail Sales (Mar), New York Fed Services Business Activity (Apr), Industrial Production (Mar), Capacity Utilization (Mar), Manufacturing (SIC) Production (Mar), Business Inventories (Feb), NAHB Housing Market Index (Apr), Net Long-term and Total Net TIC Flows (Feb)

• Thursday: Housing Starts (Mar), Building Permits (Mar preliminary), Initial Jobless Claims (Apr 12), Continuing Claims (Apr 5), Philidelphia Fed Business Outlook (Apr)

• Friday: Good Friday Holiday — no economic releases scheduled

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

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Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

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The fast price swings of commodities will result in significant volatility in an investor's holdings.

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