Monthly market summary – Review of April 2025

The US was the worst performing equity market in April. The 0.9% loss experienced in US dollar terms was increased to a loss of 3.9% for sterling-based investors due to the weakness of the US dollar. Energy was the weakest sector along with the healthcare and financials sectors, with consumer staples and IT the best performers. Meanwhile, Trump’s tariffs weakened business confidence, hindering investment and spending decisions, and increasing the risk of a recession.

Like the US, European markets were impacted by the uncertainty caused by the reciprocal tariffs. However, an interest rate cut from the European Central Bank (ECB) and supportive fiscal policies helped provide relief. Overall, European ex UK equities were up 1.6% over the month. Like the US, the energy sector was the weakest with defensive areas, including consumer staples and utilities, showing resilience.

UK equities also faced the same challenges from trade policy uncertainties and ended the month down 0.2%. The energy sector was once again the main laggard, whereas the utilities sector, known for its defensive characteristics, was the top performer. Additionally, the more domestically focused small-cap companies (up 3.6%) outperformed large cap (down 1.4%) over the month.

April saw an escalation in trade tensions between the US and China. This weighed on Chinese equities, which ended the month down 7.5%. Overall, emerging markets proved to be more were resilient and were down only 2.1%. Mexico was the top performer as it faced no new trade tariffs on 2 April, whilst Brazil was notably strong, supported by the strength of the Brazilian real. Elsewhere, India continued to do well, and South Africa was up, helped by the surge in the gold price  

There was significant volatility in bond markets over the month. There was a sharp spike in US Treasury yields and government bond yields fell across Europe and the UK. At the end of the month, US Treasuries were up 0.5%, UK gilts were up 1.8%, global corporate bonds were up 0.4%, and global government bonds were up 1.3%.  

Source: Quilter Investors as at 30 April 2025. Total return, percentage growth over period 31 March 2025 to 30 April 2025. The performance figures shown for equities are represented by an appropriate MSCI index. global bonds by the Bloomberg Global Aggregate (GBP Hedged) Index, US Treasuries by the ICE BofA US Treasury (GBP Hedged) Index, UK gilts by the ICE BofA UK Gilt Index, global corporate bonds.by the Bloomberg Global Aggregate Corporate (GBP Hedged) Index, and global government bonds by the Bloomberg Global Aggregate Government Treasuries (GBP Hedged) Index.