Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
April in review
Markets remained volatile through April, driven primarily by an escalating trade war that threatens to dampen global economic growth and rising geopolitical tensions. Equities declined sharply early in the month, with Canadian and U.S. markets falling 6.19% and 9.05%, respectively, by April 11, before recovering much of the losses by month-end. Sector performance in Canada was mixed for the month, with Consumer Staples (5.55%) leading and Energy (-6.29%) and Health Care (-6.75%) lagging. U.S. Energy was notably weak (-13.65%). Heightened U.S.–China trade tensions weighed on sentiment, fueling inflation concerns and pushing investors toward safe-haven assets. Bond markets swung widely throughout the month, with Canadian bonds ending the month down 0.65% and U.S. bonds up 0.39%. Commodities diverged: gold rose 5.36%, while oil and natural gas dropped sharply, down 17.96% and 21.87%, respectively. Emerging markets gained 1.34%, buoyed by a weaker U.S. dollar and investor interest in India.
Here are some of April's most notable events:
U.S.–China trade tensions escalate. Trade relations between the U.S. and China deteriorated sharply in April, contributing to renewed market volatility. Early in the month, the U.S. implemented sweeping tariff measures, including a 10% baseline tariff on imports from over 180 countries, which prompted China to respond with a 34% tariff on U.S. goods. By April 9, U.S. tariffs on China climbed to 145%, while non-retaliating countries received a 90 day pause. China responded in kind by raising tariffs on U.S. goods to 125% just days later. President Trump said China must make substantial concessions before tariffs are removed and indicated it’s unlikely he will delay higher tariffs again, though he noted the highest tariffs may not be sustainable. These tit-for-tat measures disrupted global supply chains and weighed on investor sentiment amid concerns about the global economic outlook.
Global growth falls amid trade tensions. The International Monetary Fund (IMF) cut its global economic growth forecast for 2025 to 2.8% from 3.3%, citing escalating trade tensions and rising policy uncertainty. The IMF also noted that while Canada’s economy is expected to grow this year, the pace will be slower than in 2024. Supporting this outlook, Canada’s real GDP declined by 0.2% in February, driven by weakness in transportation sectors, though manufacturing rose 0.6%. Meanwhile, the U.S. economy contracted by 0.3% in Q1, its first decline since 2022, as higher imports offset consumer and investment gains.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.21 | 1.00 | 4.08 | 187.58 |
| Canadian Bonds (FTSE Canada Universe Bond) | -0.65 | 1.36 | 9.13 | 1,184.76 |
| Canadian Equities (S&P/TSX Composite) | -0.09 | 1.42 | 17.86 | 24,841.68 |
| U.S. Bonds (Barclays U.S. Aggregated Bond, US$) | 0.39 | 3.18 | 8.02 | 2,258.75 |
| U.S. Equities (S&P 500, US$) | -0.68 | -4.93 | 12.07 | 5,569.06 |
| Global Equities (MSCI World, US$) | 0.93 | -0.76 | 12.66 | 3,655.52 |
| Emerging Marketings (MSCI Emerging Markets, US$) | 1.34 | 4.37 | 9.54 | 1,112.84 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | 4.27 | 4.24 | -0.15 | 0.7247 |
| C$/Euro (€) | -0.42 | -4.71 | -5.95 | 0.6399 |
| C$/Pound (£) | 1.06 | -2.14 | -6.42 | 0.5437 |
| C$/Yen (¥) | -0.53 | -5.17 | -9.48 | 103.685 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | 5.36 | 23.29 | 36.50 | 3,319.10 |
| Oil WTI ($/barrel) | -17.96 | -17.04 | -22.25 | 58.21 |
| Natural Gas ($/MMBtu) | -21.87 | -0.27 | 1.53 | 3.33 |
†Total Return, as at April 30, 2025. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
Yields whipsaw on trade shocks and political uncertainty. Bond markets also experienced significant turbulence in April as investors reacted to heightened global uncertainty following sweeping U.S. tariff announcements. Yields spiked early in the month, with the U.S. 10-year Treasury yield climbing to 4.52%—its highest level since November 2023 and the sharpest three-day move since 2020. At one point, U.S. bonds (Barclays U.S. Aggregate Bond Index) were down 2.54% and Canadian bonds (the FTSE Canada Universe Bond Index) fell 2.46%, reflecting rapid outflows from the debt market. The selloff was driven by rising inflation concerns, expectations for higher interest rates, diminished global demand for Treasuries, and growing concerns over the U.S.’s fiscal outlook and trade policies. However, as the month progressed, investor demand for safe-haven assets returned, lifting U.S. bonds by 0.39% while Canadian bonds lagged, down 0.65%.
Did you know?
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