Weekly Market Update – April 25, 2025

Quick Takes

• For the week, the S&P 500 Index was up +4.6%, the small cap Russell 2000 Index was up +4.1% and the tech-heavy Nasdaq Composite Index jumped +6.7%. Solid corporate earnings reports appeared to outweigh anxiety surrounding tariff and trade uncertainty.
• The yields on U.S. Treasurys fell across the curve for the second straight week. The Bloomberg U.S. Aggregate Bond Index rallied +0.7 and the Bloomberg Global Aggregate ex U.S. Bond Index was up +0.1%.
• Volatility in stocks and bonds is down considerably from the historical high levels from just two weeks ago. The CBOE Volatility (VIX) Index (stock volatility) plunged from 52.3 on April 8 down to 24.8 on Friday. The MOVE Index (Treasury bond volatility) fell from 139.9 on April 8 to 105.8 on Friday.

Source: Bloomberg. Data as of April 25, 2025.
Price Returns for Equity, Total Returns for Bonds.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.

Technology earnings trump tariffs as stocks and bonds rally

Little was solved regarding the uncertainty surrounding tariffs, but stocks still rallied hard last week, particularly technology-related firms. For the week, the S&P 500 Index was up +4.6%, the small cap Russell 2000 Index was up +4.1% and the tech-heavy Nasdaq Composite Index jumped +6.7%. Positive corporate earnings results appear to be offsetting the tariff-induced anxiety that sent stocks tumbling over the first couple weeks of the month. After sinking -12.1% from April 2 to April 8 on the Liberation Day reciprocal tariff announcements, the S&P 500 has increased +10.9% and is only down -1.5% for the month of April with just 3 trading days left. A solid earnings report from Alphabet (parent company of Google) helped buoy tech stocks at the end of the week, ahead of other Magnificent Seven (Mag 7) members reports this week from Amazon.com, Apple, Meta Platforms, and Microsoft. Curiously, on their earnings call Alphabet management didn’t use the words tariff or trade and rose +1.7% on Friday, for a weekly gain of +7.1%. It will be interesting to see if the other Mag 7 members will take a similar approach this week given how well investors reacted to Alphabet’s lack of addressing tariffs. If earnings can, in fact, overshadow tariff fears, markets may be able to rebound further in the coming week, which is the busiest stretch of reports in the first-quarter earnings season. Approximately a third of S&P 500 companies are scheduled to report this week (see The Week Ahead section below for more details). 

The change in market tone last week was palpable from a volatility perspective as well. A little more than a week after experiencing its second-largest five-day increase in volatility on record, on April 15, the CBOE Volatility Index (VIX) plunged -27.5 points, falling from 52.3 down to 24.8 on Friday. According to Bespoke Investment Group, since 1990, the only other times the VIX has fallen more than -20 points in five trading days have been on 11/3/08 (-26.4), 11/28/08 (-25), and 3/23/20 (-21.1). 

Non-U.S. stocks also rallied but lost some of their recent outperformance against U.S. stocks. Developed market international stocks (as measured by the MSCI EAFE Index) were up +2.9% last week while emerging market stocks (the MSCI Emerging Markets Index) were up +2.8%. The U.S. Dollar Index rebounded as well, providing a bit of a headwind for non-U.S. stock, rising +0.2% after four weeks of declines. 

Like stocks, the usually quiet world of bonds had its share of volatility in the first half of April. There was a disorderly stampede out of U.S. Treasurys (UST) in the second week of the month, but that too appears to have been a temporary imbalance. The yields on U.S. Treasurys fell across the curve for the second straight week. The yield on the 10-year UST and 2-year UST were down another -9 and -5 basis points respectively to finish at 4.24% and 3.75%. Like the VIX volatility index for stocks, U.S. Treasury Volatility continued to fall from its highest level since October 2023 when the MOVE Index hit 139.88 on April 8. On Friday it closed at 105.79, about where it was just before the April 2 Liberation Day tariff press conference. With bond yields and bond volatility falling the Bloomberg U.S. Aggregate Bond Index rallied +0.7, following the prior week’s +0.9% gain. Non-U.S. bonds, as measured by the Bloomberg Global Aggregate ex U.S. Bond Index, were up a slight +0.1% following a +1.1% gain the previous week. 

There is still plenty of concern about how tariffs could impact global markets in the months to come. President Trump said aboard Air Force One that he was unlikely to extend a 90-day delay on reciprocal tariffs. Stocks initially dipped on the remarks but ultimately regained their footing as anxiety waned. Late Friday the Wall Street Journal reported that the Trump administration is working on a new template to streamline tariff negotiations with countries around the globe which also appeared to calm investors as the week concluded.

The Week Ahead

The calendar is chock full of activity this week with plenty of economic data and a bevy of earnings reports. On the macroeconomic front, Monday is a light day with just the Dallas Fed Manufacturing Survey on tap. But things pick up quickly on Tuesday with Wholesale Inventories, Home Price Indices from S&P CoreLogic and the FHFA, plus JOLTS Job Openings and Consumer Confidence. The Bureau of Economic Analysis releases first-quarter GDP growth on Wednesday along with the Personal Consumption Expenditures Price Index – widely seen as the Federal Reserve’s preferred inflation gauge – later that day. Weekly MBA Mortgage Applications and Pending Home Sales are also on deck Wednesday. Thursday brings the usual weekly Initial Jobless Claims, as well as Construction Spending and Manufacturing PMIs from the ISM and S&P Global. On Friday, all eyes will be on the Bureau of Labor Statistics release of the April Employment Situation Report.

Hundreds of companies will be announcing their quarterly earnings results this week. A sampling of the reports includes Domino’s Pizza, Waste Management, and Nucor on Monday, followed by Coca-Cola, UPS, GM, Pfizer, Starbucks, Snap and Visa on Tuesday. Magnificent Seven members Meta Platforms and Microsoft report on Wednesday along with Caterpillar, ADP, General Electric, Wingstop, and Qualcomm. Thursday is the busiest day with Eli Lilly, Mastercard, Apple, Amazon, Reddit, Roku, and Stryker among others. Two oil giants Chevron and Exxon Mobil close out the week on Friday, along with Cisco, Dupont, and TRowe.

Chart of the Week

The Commerce Department reported Durable Goods Orders for long-lasting items such as televisions, appliances and transportation equipment surged +9.2% in March, bolstered by a +139% increase in orders for nondefense aircrafts and parts as Boeing contracts stacked up ahead of the Trump administration tariffs. That was well above expectations for a +2.0% increase and the prior month’s +0.9% rise (revised down from +1.0%). Durable Goods Orders Excluding Transportation were flat (0.0%), behind expectations for +0.3% and down from the prior month’s +0.7% (unrevised). The important Core Capital Goods Orders (capital goods excluding volatile sectors like transportation and defense), a proxy for business spending, was up +0.1%, matching expectations and up from -0.3% the prior month (revised lower from -0.2%). Core Capital Goods Shipments, which are factored into GDP, rose +0.3%, beating expectations for a +0.2% increase but down from +0.7% the month before (revised down from +0.8%). The bottom line from the report is that there was a rebound in nondefense capital goods, excluding aircraft, from February which suggests a modest pickup in business spending. However, the report is for activity before the April 2 Liberation Day reciprocal tariff announcement which may cloud future activity.

Boeing contracts and tariff ‘front running’ boost durable-goods orders

Durable Goods Orders, Month-over-Month percentage change (%)

Source: U.S. Census Bureau, Trading Economics.

Did You Know?

COLLEGE COSTS CONTRACT – College tuition has increased +899% since 1983. The overall inflation rate during this period was +225%, but annual tuition and fees to attend a four-year private school, since peaking at $44,120 in 2020, have fallen -5.8% to $41,540 in 2024. College costs are down even more at four-year public schools: from $12,490 in 2020 to $11,260 in 2024 (-9.8%). (Source: CNBC)

CEO SENTIMENT SINKS – The amount of U.S. CEOs that forecast a slowdown or recession in the next six months has risen to 62% in April versus 48% in March. CEOs anticipating a severe recession for the U.S. economy crept up to 14% from 9% in March but is still far from a base case expectation. More concerning is that 37% of CEOs surveyed expect profitability to increase over the next year, that’s less than half of the 76% in January. (Source: Chief Executive)

WHAT INFLATION?  – The Consumer Price Index (CPI, -0.1%), Producer Price Index (PPI, -0.4%) and Import Prices Index (-0.1%) all declined on a month-over-month basis in March, the first time all three fell in the same month since April 2020. Since the start of 2010, there have been only 14 other months in which all three inflation indicators have declined in the same month. (Source: Bespoke)

This Week in History

SOLAR BATTERY BEGINNINGS – On April 25, 1954, Bell Labs showed off the first practical solar cell. At its first public demonstration, the silicon solar battery ran devices with relatively low power requirements such as a pocket-size radio FM transmitter and a toy Ferris wheel. Bell researchers calculated that the battery was about 6% efficient at converting sunlight into power. Compare that with today’s solar cells, which operate at 40% efficiency, according to the American Physical Society. (Source: The Wall Street Journal)

Economic Review

• The preliminary “flash” S&P Global U.S. Composite Purchasing Managers Index (PMI) showed economic activity sour in April after the Trump administration imposed widespread tariffs, falling to 51.2 from 53.5 in March, the lowest reading since December 2023. Wall Street was expecting a decline to 52.0. Levels above 50 indicate economic expansion, while levels below 50 indicate contraction. The Manufacturing PMI actually rose slightly, up to 50.7 from 50.2. However, the Services PMI sank to 51.4 from 54.4 the prior month, below expectations for a 52.6 reading. The service side of the economy — such as retailers, banks, and hospitals — employs most Americans and has driven the expansion since the pandemic. The S&P Global “flash” PMI surveys are among the first indicators of each month to give a sense of how well the U.S. economy is doing. The report showed Prices Received by manufacturers rose at the fastest rate in 13 months. 
• The Federal Reserve Bank of Chicago reported that U.S. economic activity decreased in March. The Chicago Fed National Activity Index (CFNAI) sank to -0.03 from +0.24 the prior months (which was revised up from the originally reported +0.18). That is much lower than expectations for a +0.12 reading. Readings below zero indicate below-trend-growth in the national economic activity. Two of the four broad categories of indicators used to construct the index fell from the prior month, and three made negative contributions. The Production and Income category contributed -0.09 points, down from +0.25 the prior month. The Employment, Unemployment, and Hours category contributed -0.01, up from -0.02 the prior month. The Personal Consumption and Housing category improved to +0.11 from 0.0. The Sales, Orders, and Inventories category contribution was -0.03, down from +0.01 the prior month. Overall breadth of the index declined with 41 of the 85 individual indicators making positive contributions, while 44 indicators detracted from the index and just 38 components improved while 46 indicators declined. The CFNAI three-month moving average decreased to -0.01 from +0.12 the month before. During the last 20 years, there has been a 91% correlation between the three-month index level and the quarterly change in real GDP.
• The final reading of the April University of Michigan Consumer Sentiment Index improved to 52.2 from the preliminary reading of 50.8 two weeks ago, beating expectations for a 50.5 reading but down from the prior month’s 57.0. The Current Economic Conditions component rose to 59.8 from the preliminary reading of 56.5, but down from 63.8 the prior month. The Consumer Expectations component was up to 47.3 from the initial estimate of 47.2 but down from the prior month’s final reading of 52.6. One-year inflation expectations slipped to +6.5% from the preliminary reading of +6.7% and are up from +5.0% from the previous month. The five-year inflation expectations didn’t change from +4.4% in the preliminary reading but is up from +4.1% the prior month. The bottom line from the report is that there was a welcome improvement from the depths of the preliminary readings, but sentiment remains near the depressed levels of the pandemic period. 
• The Conference Board’s Leading Economic Index (LEI) slipped -0.7% in March to 100.5 from an upwardly revised -0.2% the prior month (originally reported at -0.3%), worse than an expected -0.5% fall. Breadth of the index was mixed, with five of the 10 indicators tracking negative for the month, while five were positive. The decline was driven by a drop in Consumer Expectations of Business Conditions which contributed the largest decline (-0.26) with manufacturing New Orders (-0.22) the third largest negative contributor to the monthly decline. Stock Prices (-0.25) were the second largest negative contributor and the largest monthly decline since September 2022. On the positive side, Building Permits (+0.05) and Average Weekly Hours (+0.06) were up, as were Weekly Initial Unemployment Claims (+0.02). The LEI Coincident Index improved by +0.1, its fifth straight monthly improvement, while the LEI Lagging Index slipped by -0.1%, its first decline in six months.
• The National Association of Realtors (NAR) reported that Existing Home Sales sank -5.9% in March to a seasonally adjusted annual rate of 4.02 million units, worse than expectations for a -3.1% drop to 4.13 million units and down from the +4.4% rise of 4.27 million units reported the prior month (revised higher from 4.26 million). Year-over-year existing sales were down -2.4%. The Median Existing Home Price rose to $403,700. Year-over-year, home prices were up +2.7% compared to +3.4% the prior month. The Inventory of Homes for Sale was up +8.1% from the prior month to 1.33 million units. Unsold Inventory remained at a 4.0-month supply, up from 3.5 the previous month. This still lags the 6.0-month supply typically associated with a more balanced market. Homes Listed for Sale remained on the market for 42 days on average, up from 41 days the previous month. First-Time Buyers were 32% of sales in the month, up from 31% the month before. Historically, these buyers make up closer to 40% of home sales, but affordability has been hit hard in the last two years due to fast-rising home prices and higher mortgage rates. All-Cash Sales fell to 26% of transactions from 32% the prior month. Homes sold above list price were 21%, up from 15% a month ago. For the month, sales fell in all four regions: the Northeast was down -2.0%, the South -5.7%, the West -9.4%, and the Midwest -5.0%.
• The Commerce Department reported New Home Sales rose +7.4% in March to a rate of 724,000 units after the prior month’s +3.1% increase, or a 674,000 units annual rate, revised up from +1.8% and 676,000 units. That was above expectations for a +1.3% increase to a 685,000 unit annual rate. New Home Sales data tend to be volatile month-on-month and are often revised. New-home sales remain far below the recent peak of over 1 million units in August 2020 but are running above the pre-pandemic average of 600,000. Year-over-year, sales of new homes were up +6.0% following a +4.8% annual rate the prior month. By region, sales in the South were up +13.6% for the month and +22.3% for the trailing year. In the Northeast sales were down -22.2% for the month and -33.3% for the year. The West was down -1.4% for the month and -12.2% for the year. The Midwest saw sales rise +3.0% for the month and fall -15.9% for the year. The Median New Home Price decreased to $403,600 from $414,500 the prior month. The months of supply at the current rate of sales was 8.3, down from 8.9 the prior month.
• The Richmond Fed Manufacturing Survey fell to -13 in April from -4 the prior month, much worse than expectations for a decline to -7. The disappointing April was the result of all three component indexes dropping and remaining in contraction territory. The New Orders saw the largest decline to -15 from -4 the prior month. The Shipments component fell to -17 from -7. The Employment index decreased to -5 from -1. The future indexes for activity six months from now were lower as well. The Richmond Fed Service Sector Survey decreased to -30 from -14 the prior month, the lowest level since July 2022.
• The Kansas City Fed Manufacturing Survey declined to -4 in April from the unrevised -2 reading the prior month, but that beat expectations for a decline to -6. Current business conditions worsened. The Production index fell to -5 from +1 the prior month. New Orders ticked up to -11 from -12. Employment-related indexes declined with the Number of Employees sinking to -11 from -4 and the Average Employee Workweek falling to -6 from +6. The Prices Paid index was unchanged at +42 while the Prices Received rose to +29 from +15. The Kansas City Fed Service Sector Outlook Survey rose to +3 from 0 the prior month (unrevised).  
• Weekly MBA Mortgage Applications dropped -12.7% for the week ending April 18 following a -8.5% fall the prior week. The Purchase Index was down -6.6% after a falling -4.9% the prior week. The Refinance Index plunged -20.0% after sinking -12.4% the prior week. The average 30-Year Mortgage Rate rose to 6.90% from 6.81% the prior week, the highest it’s been since February 14.
• Weekly Initial Jobless Claims rose +6,000 to 222,000 for the week ending April 18, right in line with expectations. The prior week was revised higher by +1,000. The number of people already collecting unemployment claims (i.e., Continuing Claims) fell by -37,000 to 1,841,000 in the week ending April 11, better than expectations for 1,869,000 claims. Last week’s reading was revised lower from 1,885,000 to 1,878,000.

Asset Class Performance

Source: Bloomberg.
Asset‐class performance is presented by using market returns from an exchange‐traded fund (ETF) proxy that best represents its respective broad asset class. Returns shown are net of fund fees for and do not necessarily represent performance of specific mutual funds and/or exchange-traded funds recommended by The Retirement Planning Group. The performance of those funds may be substantially different from the performance of the broad asset classes and to proxy ETFs represented here. US Bonds (iShares Core US Aggregate Bond ETF); High‐Yield Bond (iShares iBoxx $ High Yield Corporate Bond ETF); Intl Bonds (SPDR® Bloomberg Barclays International Corporate Bond ETF); Large Growth (iShares Russell 1000 Growth ETF); Large Value (iShares Russell 1000 Value ETF); Mid Growth (iShares Russell Mid-Cap Growth ETF); Mid Value (iShares Russell Mid-Cap Value ETF); Small Growth (iShares Russell 2000 Growth ETF); Small Value (iShares Russell 2000 Value ETF); Intl Equity (iShares MSCI EAFE ETF); Emg Markets (iShares MSCI Emerging Markets ETF); and Real Estate (iShares US Real Estate ETF). The return displayed as “Allocation” is a weighted average of the ETF proxies shown as represented by 24% US Bonds, 10% International Bonds, 6% High Yield Bonds, 13.8% Large Growth, 13.8% Large Value, 3.6% Mid Growth, 3.6% Mid Value, 1.2% Small Growth, 1.2% Small Value, 16.8% International Stock, 4.2% Emerging Markets, 1.8% Real Estate.
* The term basis points (bps) refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 0.01%. Bond prices and bond yields are inversely related. As the price of a bond goes up, the yield decreases.