Tariff Tantrum

April 30, 2025

April has traditionally been one of the best months of the year for stock performance as it has been the beneficiary of last-minute deposits to IRA accounts which often go into stock mutual funds.  However, this April was very different as the tariff tantrums rocked the market with this new uncertainty causing many money managers to pull back on risks.  The one thing the market hates more than anything is uncertainty, and we had that in spades in April.  Near the end of the month there was a better tone to the market as investors appear to have FMO “fear of missing out” if or when trade deals are announced.  In addition, one would think most of the bad news regarding tariffs has been disseminated and we now wait for the good news.  Hope that good news lies ahead mitigated much of the loss and the S&P 500 ended the month .7% lower and down 5.3% for the year.  Interest rates jumped higher on tariff concerns early in the month but ended the month little changed.  Oil continued moving lower, dropping another 18.7% in April to a 4-year low, while gold hit another all-time high before closing 5.7% higher.

The month began on a Tuesday with a sharply lower open ahead of Trump’s “Liberation Day”, but shares rallied back to close positive and at the end of the first 2 days of trading the S&P was up 1%.  The tariff tantrums began on Wednesday when Trump announced massive tariffs on China and they retaliated, sending the S&P 500 to is worst day in 5 years, only to be followed the next day by an even worse day.  At the end of the first 4 days of trading the S&P 500 had plunged 8.8%, its worst weekly performance since the pandemic. The selling continued into the following week as concerns about inflation sent interest rates to their highest weekly increase in 24 years and the S&P 500 down more than 10% for the month.  That all changed on Wednesday when Trump announced a 90 day pause on the tariffs which generated the best day for the S&P 500 in 17 years and its 3^rd best day in history.  At week’s end we learned both the Consumer Price Index and the Producer Price Index showed inflation at the lowest level in years and the volatile week ended with the S&P 500 up 5.7%. The second full week was shortened by the Good Friday market holiday, and we saw a dramatic decrease in volatility as investors digested the trade news. The week ended with the S&P 500 down 1.5%.  The last full week began with the market moving lower after Trump attacked Powell talking about ways to get rid of him, only to see the market reverse when Trump backed off and said he had no intention of getting rid of him.  Investor sentiment improved on hopes for good news from several potential fronts and the S&P 500 ended the week 4.6% higher.  At month end we learned the uncertainty caused by the trade tariffs drove consumer confidence to the lowest level since 2011 and on the last day of trading the government reported first quarter GDP contracted .3%.

We often begin this paragraph talking about historic trends for the coming month, but in the current environment that seems pointless.  The market is going to be driven by news coming from the White House.  Positive news on trade deals or a softening of the rhetoric towards China should be well received.  We are going to see a plethora of major earnings reports during May, but these will be results from Q1 which are “pre-tariffs” and not that meaningful.  We will be watching guidance for some hint on the damage expected from the tariffs.  We would not be surprised over the coming months to see the slowing economy push the market to “retest” the sub 5000 area which we believe would be a good entry point, but it appears President Trump knows he controls the narrative and may focus on a better stock market.  If the market does continue to recover, we will become more defensive in the 5800+ area of the S&P 500.

If you know someone who would be interested in learning more about Greenberg Financial Group, please contact us at 520-544-4909, or visit our website at www.greenbergfinancial.com. As always, the key to successful investing is to have a portfolio that is consistent with your investment objectives and risk tolerance. We invite you to listen to our weekly Money Matters radio show which airs every Sunday Morning from 8:00 AM to 10:00 AM on KNST AM 790.  You can also listen to us on iHeart radio, follow us on Twitter @gbergfinancial or on Facebook under Greenberg Financial Group.  Previous radio shows are available by going to www.iheart.com or using the iHeart app and typing Money Matters with Dean Greenberg.