Market Commentary

For the week ending 4/25/2025

 

Muted rhetoric surrounding tariffs and some strong quarterly earnings reports from major technology companies led to a positive week on Wall Street and all three major indices closed up on Friday.

However, consumer sentiment continues to drop, and the International Monetary Fund has scaled back its forecast for global economic growth amid trade war concerns.

According to the University of Michigan’s monthly report, consumer sentiment sank to its lowest level in nearly three years in April, falling from 57 to 52.2. By comparison, consumer sentiment registered 74 heading into the year.

The IMF is now projecting a 2.8% annual GDP growth rate for 2025, and 3.0% for 2026, down from 3.3% for both years, citing tariff risks for the drop.

Tariffs are also playing a key role in Canadian politics in the leadup to federal election day. Canadians head to the polls today, amid growing concerns about their economic outlook and heightened nationalism in the face of President Trump’s call to annex the country.

Heading into 2024, conservative party head Pierre Poilievre held a comfortable lead amid the chaos surrounding longtime leader Justin Trudeau and his minority government’s exit. Since then, the heir to Trudeau’s Liberal party, economist Mark Carney, has closed the gap in the polls due to his hardline stance against U.S. threats and economic nationalism.

As investors monitor those polls this week, they’ll also be digesting quarterly reports during one of the busiest news weeks of the year. On the docket are several key jobs reports, the PCE inflation data, and quarterly reports from nearly 40% of S&P 500 by market cap, including Magnificent Seven companies Apple, Microsoft, Amazon and Meta Platforms.

We anticipate that the markets will remain volatile as investors navigate the complexities of international trade negotiations and assess the potential for further policy shifts. While some analysts maintain cautious optimism, citing historical market recoveries following downturns, the prevailing global sentiment is one of uncertainty.

For the week, the Dow closed up 2.5% to 40,114, the NASDAQ jumped 6.7% to 17,383 and the S&P climbed 4.6% to 5,525.

The yield on the 10-year treasury fell -7 bps to 4.26%, Oil dropped -1.4% to $63.06/bbl, and gold declined $25 to $3,303.

 

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