April was another whirlwind of a month for markets, which were shaken to their core by the larger than anticipated reciprocal tariffs announced on April 2nd. The S&P 500 peaked with an intraday high of 5,695.31 on April 2nd, then bottomed out with an intraday low of 4,835.04 on the 7th, during which the index saw a peak-to-trough decline of -15.1%. That monthly drawdown was the largest since March of 2020. A 15% drawdown for the S&P 500 is rare, but it still happens an average of once every 30 months, so we were “overdue” for a monthly drop of this magnitude relative to history.
This past month was notable not only for its downturn but also its swift recovery. Despite the significant downturn, the market was able to recoup most of its losses following the announcement of a 90-day pause in most reciprocal tariffs before returning to a buy signal. With the May 1st intraday gain, SPX returned to the same 5,650 level it was a month prior. It has officially retraced all the last month’s losses but now faces resistance here and there at 5,750.
While the S&P 500 was able to recover, so too did most other areas of the market. The S&P 500, Nasdaq-100 (NDX), MSCI ACWI ex US ETF and Gold all recovered at least 10% from their lows in April, highlighting the broad-based nature of last month’s downturn and recovery. There has been a strong recovery within the international equities, especially in Europe, although long-term strength from the previous two years still favors domestic equities. The commodities group overtook domestic equities for 1st place within the Dynamic Asset Level Investments (DALI) class rankings that I use. Precious metals were among the biggest risers during April, with Gold gaining 5% in the month. Fixed income has failed to show signs of life for some time, and that asset class moved back into last place within DALI in early April. While May is unlikely to bring about as many changes as April did, volatility remains historically elevated.
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