Week in Review: April 25, 2025

April 28, 2025

Recap & Commentary

Markets ended the week higher following a temporary easing of tariff concerns and President Trump walking back comments about his desire to replace Fed Chair Jay Powell. Volatility, however, remained elevated, as the S&P 500 rose or fell by 1.5% or more from the prior day on four out of the five days. By week end, the S&P 500 had exited correction territory.

The week had an inauspicious start with President Trump stating his desire to replace Fed Chair Jay Powell and the White House reportedly studying the feasibility of doing so. In the wake of those comments, the S&P 500 fell nearly 3.5% highlighting investor concerns about what even an attempted removal might mean for the Fed’s independence, future politicization of the Fed, and longer-term confidence in US assets, particularly Treasuries and the US dollar.

The remainder of the week saw equity markets rally, initially led by comments from Treasury Secretary Scott Bessent said he expects the US and China to begin trade talks in the “very near future” and that current tariffs between China and the US are “unsustainable.” Trump followed by saying that China tariffs of 145% would “come down substantially, but it won’t be zero.” Trump also said he is not planning to remove Powell from his position as Fed Chair.

The dual message of lower China tariffs and leaving Fed leadership unchanged helped assuage market concerns, though comments by Trump at the end of the week suggesting he is unlikely to extend the current 90-day pause on reciprocal tariff served as a reminder of the continued uncertainty surrounding tariffs and trade policy.

Economic Commentary

According to industry group S&P Global, US business activity slowed to a 16-month low in April, led by a slowing in services that was only partially offset by a small increase in manufacturing. Average prices charged rose to a 13-month high, while manufacturing prices rose to a 29-month high. The higher prices were broadly attributed to rising costs resulting from tariffs. Sentiment regarding companies’ outlook for the year ahead fell to its second lowest level since the pandemic, led by a deterioration in the outlook of services companies, as manufacturing companies remained more optimistic.

Housing data highlighted the sector’s ongoing struggles and lack of direction as new home sales rose 7.4% in March, while existing home sales fell 5.9%. The rise in new home sales was attributed to a small pull back in mortgage rates. The National Association of Homebuilders estimates that recently announced tariffs have increased the price of a new home by nearly $11K. The pullback in existing home sales, the largest monthly decline November 2022, followed a 4.4% gain in February and came even as supply increased. At a minimum, the decline highlighted the volatile nature of housing data but may also reflect the current state of overall heightened economic uncertainty.

Durable goods orders jumped 9.2% in March, the largest monthly gain in eight months, propelled by aircraft orders. A subset of the data measuring core business spending rose just 0.1% pointing to tepid demand.

Of Note

Through Friday, 36% of S&P 500 companies had reported 1Q25 earnings. Thus far, 73% have exceeded their consensus forecast. Elevated uncertainty has led many companies to cut full-year guidance or rescind prior guidance altogether.

Market Indices   (As of 04/25/2025)

• 1Q25 GDP
• April Employment Report
• Core PCE Inflation
• ISM Manufacturing
• Pending Home Sales
• Consumer Confidence
• JOLTs Job Openings
• Initial Jobless Claims