Weekly market recap & what's ahead - 7 April 2025

Weekly Market Recap & What's Ahead

7 April 2025 (Week of 31 March to 4 April 2025)

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Key Takeaways

• Equities faced severe declines following Trump’s tariff announcements; tech and auto sectors hardest hit.
• Volatility spiked sharply with VIX reaching 45.31 amid escalating recession fears.
• Bitcoin retreated below $80k after a volatile week for digital assets.
• Bonds rallied strongly as investors fled to safety throughout the week.
• Commodities slumped broadly on recession fears and tariff impacts.
• JPY and CHF strengthened notably; USD saw initial weakness but partly stabilized by week-end.

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Market Recap

Equities

Markets began the week cautiously, rising slightly on March 31 as investors hoped for tariff relief. However, optimism quickly faded on April 2 as President Trump’s extensive tariffs were unveiled, triggering a major global sell-off. On April 3, the S&P 500 plunged -4.84%, Nasdaq -5.41%, and Dow -3.98%, led by tech declines such as Apple (-9.2%) and Nvidia (-7.8%). Selling intensified further on April 4, with the S&P 500 dropping an additional -5.97%, erasing over 320 points amid recession fears. European equities mirrored declines, notably on April 3 with the DAX (-3.0%) and CAC 40 (-3.3%), particularly hitting autos and banks. Asian markets also slumped, with Japan’s Nikkei down -8.7% by week's end.

Volatility

Market volatility initially rose moderately early in the week but escalated sharply after Trump's April 2 tariff announcement. The VIX surged, peaking at 45.31 (+50.93%) on April 4, its highest since the early COVID pandemic. Short-term volatility also spiked dramatically, with VIX1D reaching 81.89 (+142.06%), reflecting extreme short-term market anxiety. Elevated volatility persisted through the end of the week, suggesting ongoing market uncertainty.

Digital Assets

Cryptocurrencies started the week with minor gains but turned volatile after tariff announcements. Bitcoin initially edged up on March 31, reaching around $83,272, but reversed sharply by April 4 to settle at $75,699 (-3.43%). Ethereum and XRP saw similar declines, dropping to $1,506 (-4.64%) and (-11.70%), respectively. Crypto stocks faced mixed outcomes amid broader market pressures, reflecting investor caution.

Fixed Income

Bond markets began the week relatively steady but rallied significantly following the tariff-induced equity sell-off. The US 2-year Treasury yield dropped notably, ending the week down 22 basis points at 3.64%, signaling increased expectations of aggressive Fed rate cuts. Japanese bond yields similarly fell sharply amid heightened recession concerns, underscoring broader global flight-to-safety.

Commodities

Commodity markets initially showed resilience early in the week, but faced a sharp downturn post-tariff announcements. Copper experienced significant volatility, briefly dropping 7% amid growing recession fears. WTI crude also slumped dramatically below $60/barrel before stabilizing modestly. Gold traded steadily near $3,100, supported by safe-haven demand, while silver faced sharp declines, erasing year-to-date gains due to recession fears.

Currencies

Currency markets were notably volatile throughout the week, particularly after tariff announcements. Safe havens CHF and JPY strengthened significantly; USDJPY briefly dipped below 145.00 on April 4. Pro-cyclical currencies, including AUD and CAD, initially weakened substantially but partially recovered towards week-end as markets adjusted to ongoing uncertainty.

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Looking Ahead (7 to 11 April 2025)

Markets face a crucial week with several major economic indicators and policy events:

• US and Chinese tariffs are scheduled to take effect on April 9 and 10, respectively, heightening fears of escalating global trade tensions.
• US CPI data for March will be released on April 10, closely watched as an indicator for inflationary pressures amid tariff-induced market volatility.
• Fed meeting minutes from the March FOMC meeting on April 9 will provide insights into policymakers' views on the economy, inflation risks, and potential rate cuts.
• Earnings season kicks off with critical reports from leading financial institutions including JPMorgan Chase, Wells Fargo, and BlackRock on April 11, setting the tone for investor sentiment and market direction.
• Consumer sentiment data due April 11 and consumer credit reports on April 7 will shed light on consumer resilience amid escalating economic uncertainty.
• Additional key data includes the Producer Price Index (April 11), weekly jobless claims (April 10), and insights from speeches by Fed officials, which could further shape market expectations.

Related Research

• Navigating Trump’s tariffs: your top investment questions answered 
• Why markets just got so volatile - and what it means for investors 
• Five common mistakes investors make when markets get wild 
• Commodities weekly: Tariff-led recession pain triggers sharp reversal 
   
• Market Quick Take - 7 April 2025
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