Weekly Market Performance — April 17, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of April 14, 2025. U.S. stocks reversed weekly gains to start spring break after trade and economic uncertainty continued to weigh on risk sentiment, failing to receive relief from Federal Reserve (Fed) Chair Jerome Powell in his Wednesday afternoon speech. Overseas, European and Asian equities closed the holiday-shortened week in positive territory on the back of optimistic trade talks and a tariff reprieve, while commodities moved higher on the back of gold extending its blistering rally. In fixed income, Treasury yields ended the week lower as investors flocked back to haven assets during Wednesday’s equity slide.

Index Performance

U.S. and International Equities

U.S. Equities: In the wake of last week’s relief rally, the major averages closed the holiday-shortened week below the flatline thanks to late week declines. The S&P 500 outperformed both the Nasdaq and Dow Jones Industrial Average, while the small cap Russell 2000 topped its large cap peers with a moderate week-to-date gain.

Following daily whipsaws over the last few weeks, a relative feeling of calm washed over markets for the majority of the week. Fragile risk sentiment received a lift after President Donald Trump announced a temporary tariff exemption for a range of consumer electronics, buoying tech stocks and the broader market. However, Friday and Monday’s winning streak was snapped after the White House launched national security probes into pharmaceuticals and semiconductors, indicating sectoral levies may be around the corner. Selling spilled over into the latter half of the week with markets resuming sharp declines as U.S. semiconductor export restrictions and hawkish-leaning remarks from Fed Chair Jerome Powell collided Wednesday, sparking a fresh wave of volatility across Wall Street. Major indexes continued to chop along amid trade talk optimism and a notable number of options expiries to close the abbreviated week but remained below the week-to-date flatline.

In corporate news, banks and financial services companies continued to deliver better-than-expected earnings results, with Bank of America (BAC), Citigroup (C), American Express (AXP), and Goldman Sachs (GS) among highlights. United Airlines (UAL), Johnson & Johnson (JNJ), and transportation giant J.B. Hunt (JBHT) also topped estimates.

International Equities: European equities moved higher since Monday’s open. With trade war concerns ebbing to start the week, the European benchmark STOXX 600 climbed just over four percent, shrugging off softer-than-expected U.K. labor data and a drop in the German ZEW sentiment index. The risk-on tone took a breather in the second half of the week as results from Dutch chipmaker ASML (ASML) missed orders expectations and luxury retailers continued to underwhelm on weak demand from China. Despite the early-week reprieve, tariff-related uncertainty around economic growth and corporate profits weighed on markets as another 0.25% rate cut from the European Central Bank (ECB) on Thursday failed to inspire a rally.

Major Asian markets ended higher with trade talk optimism driving markets over the last four days. The Trump administration’s temporary exemption of consumer electronics lifted stocks, particularly names within the Apple (AAPL) supply chain, and subsequent talks of potential tariff relief for vehicles and auto parts extended gains. U.S.-initiated probes indicated China-U.S. trade tensions will persist, weighing on sentiment, but equities bounced back Thursday on progress in trade negotiations with Japan and an apparent openness to discussions from China. Japan led gains across the region, while both Hong Kong and mainland China ended in positive territory. South Korea also gained ground; however, Taiwan closed the week lower.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded higher this week as bond market volatility eased from its recent peak, moving steadily higher before trimming gains during Thursday’s session. The rate-sensitive two-year yield traded 16 basis points (0.16%) lower, while the 10-year yield traded 17 (0.17%) basis points lower.

Treasuries rallied alongside equities to start the week, sending yields lower, before extending gains following Fed Chair Powell’s prepared remarks Wednesday afternoon. Powell noted that stiffer-than-anticipated tariff increases could result in slower growth and higher inflation, while also reiterating the Fed’s “wait for clarity” stance. Yields continued to move lower Wednesday as investors moved back toward haven assets; however, while the Fed Chair stated he currently does not envision a “Fed put” as equity markets were hoping, the bond market was comforted by an upbeat outlook on funding conditions and reserve abundance. Broadly speaking, investors welcomed easing volatility, as Treasury moves during the abbreviated week offered some reassurance to investors that the securities are maintaining their haven qualities after last week’s tandem sell-off with stocks. Meanwhile, the Treasury Department auctioned $13 billion in 20-year securities Wednesday, which was not outstanding, but the supply was met with solid demand.

Commodities and Currencies: Following range-bound trading to start the week, the Bloomberg Commodities Index was lifted higher on the back of strong Wednesday gains. West Texas Intermediate (WTI) crude oil tracked its first weekly gain of April after the U.S. imposed another batch of sanctions on Iranian exports (targeting a China-based refiner), adding to lingering supply fears from the OPEC+ announcement of additional output cuts for members, including Iraq and Kazakhstan. Prices also received support from short-covering and a weaker dollar. A softer dollar combined with the latest ramp in U.S.-China trade tensions helped gold continue its blistering rally above $3,300 per ounce. Copper logged solid gains while silver ended slightly higher. In currencies, the euro was little changed versus the dollar in choppy trading after the ECB’s Thursday rate cut, while the yen strengthened slightly against the greenback.

Economic Weekly Roundup

Retail Sales Boosted by Autos. March retail sales rose 1.4% after a slight gain in February and an outright decline in January. Since December, nominal retail sales (not adjusted for inflation) rose 0.6% throughout the first quarter (Q1) of this year. Adjusting for inflation, retail sales decreased slightly over the last three months, indicating economic growth downshifted in Q1. Appetite for restaurant spending returned with a vengeance in March, rising almost 2% in March. The inventory-to-sales ratio for autos is below pre-pandemic levels, keeping the car market tight and prices elevated.

Growth in Q1 downshifted significantly as consumers and businesses pulled back the pace of spending. If the economy can hold on long enough during this period of tariff uncertainty, we could see some relief when the Fed eventually loosens monetary policy.

Import Prices Fell Just Before “Liberation Day.” March import prices declined 0.1% from the previous month despite the anticipated change in global trade. Granted, Tuesday’s import/export price report covers the period before the official tariff announcements, but investors had thought import prices could rise in anticipation. Import prices were cheaper than the previous month, and February’s estimate was revised down to 0.2% from 0.4%. For finished goods, the report is more nuanced. Civilian aircraft and parts rose during the month, but prices for autos fell for the fourth consecutive month. Consumer finished goods — especially household goods — fell 0.2% for the second consecutive month.

Excluding potential impacts from trade wars, a slower global economy could help alleviate inflation pressures. Yields remain below last week’s highs as investors anticipate President Trump will announce further alterations to his trade policy, including some temporary exceptions for the auto industry.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Leading Index (Mar)

• Tuesday: Philadelphia Fed Non-Manufacturing Activity (Apr), Richmond Fed Manufacturing Index (Apr), Richmond Fed Business Conditions (Apr)

• Wednesday: MBA Mortgage Applications (Apr 18), S&P Global U.S. Manufactuing, Services, and Composite PMIs (Apr preliminary), New Home Sales (Mar), Building Permits (Mar final), Fed Beige Book Release

• Thursday: Chicago Fed National Activity Index (Mar), Durable Goods Orders (Mar preliminary), Captial Goods Orders and Shipments (Mar preliminary), Initial Jobless Claims (Apr 19), Continuing Claims (Apr 12), Existing Home Sales (Mar), Kansas City Fed Manufacturing Index (Apr)

• Friday: University of Michigan Consumer Sentiment report (Apr final), Kansas City Fed Services Activity (Apr), Bloomberg U.S. Economic Survey (Apr)

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