AE Wealth Management: Weekly Market Insights | 4/20/25 – 4/26/25
Weekly Market Commentary
THE WEEK IN REVIEW: April 20-26, 2025
You’re fired. (Not!)
Volatility continues to reign in the markets. As last week started, President Trump renewed his very public criticism of Federal Reserve Chair Jerome Powell. Predictably, the markets panicked, and we had a fresh round of selling. At one point last Monday, the Dow was down well over 1,300 points.1
Trump had continued his haranguing of Powell because Trump wants the Fed to lower rates to help the economy. Powell says he and the Fed are unbiased, independent and apolitical. (All debatable, but that’s the official stance.) Trump even floated the idea that he could fire Powell before his term ends in 2026. There was a change of heart by the next day, with the president announcing he had “no intention” of firing Powell.2 Whatever the logic or motivation was for this “endorsement,” it seemed like enough for the markets to reverse course, make back Monday’s losses and plow ahead.
Trump then followed up with another announcement that he felt tariffs on China would “come down substantially, but it won’t be zero.”3 Again, markets surged ahead; the Dow rose above 40,000 on Thursday, while the S&P 500 crept up towards 5,400.4
Unless things change for the worse in the next few weeks or months, it appears the lows we saw on April 8 — when the S&P 500 dipped below 5,000 and the Dow bottomed out at 37,645 — were the actual bottom. We ended the week focused on earnings, led by Google parent Alphabet, and optimism that the tariff hubbub has calmed somewhat and deals on trade would be coming soon (more in the next section).5 We ended the week at 5,525.21 on the S&P 500, almost at the same levels we saw just before the April “Liberation Day” announcement and out of correction territory. The Dow closed Friday at 40,114, also a level we hadn’t seen since the tariff announcement.
At the end of the day, we don’t have any insight as to what gain the president had in going after Powell so publicly and why the markets reacted like they did. Powell has said he is hesitant to cut rates until he sees more weakness in the economy and lower inflation before he moves.6 The markets don’t like higher rates, so if Trump ousts Powell, who will he replace him with? Probably someone who will lower rates. So why would the market freak out?
The Fed has a very structured organization, and Powell is not some kind of mystic who conjures up magic no one can explain. Fed officials all meet regularly and vote on policy, and Powell by himself cannot mandate anything. With all this going on, it seems we overcorrected and have found our level once more.
Tariffs will continue to hover for the foreseeable future, but we have the reconciliation bill to look forward to in the early summer. If deregulation and lower energy costs finally boost the economy and we resolve the trade disputes, that would all be additive. We’d rate these in the positive column, but it’s important to remember anything could happen: the tariff wars may continue, the “Big Beautiful Bill” might get scuttled, and the bureaucracy and courts could be used to stall deregulation and energy production. Despite all this, we’re still optimistic about 2025 and think we have a very good possibility of ending the year on an up note.
Next-Level Chess
Remember how Mr. Spock and his father, Sarek, played some wacky three-level chess-type game on Star Trek? Some are referring to the tariff turmoil as the White House playing a sort of next-level chess, while everyone else is playing checkers.7
The tariff fight has shaken a lot of trees, and if Trump can somehow land the plane on this, we will give full credit where it is due. However, it’s not the usual practice to unite one’s adversaries before going to war. The game plan should have been to nail down our most important relationships (Canada and Mexico) first, then lean on our allies (South Korea, Japan, India, Australia and the EU). Once we united everyone, we could focus on the really bad global trade abusers.
That hasn’t happened, though. We keep hearing that there are over 100 countries ready to sign a deal with us, but it would feel much better if we saw just one deal.8 There’s no need for the deal to be “4th-level”; we’d take a plain ol’ trade deal that works for the U.S. You can’t change the world trade order overnight, but at some point, people will become frustrated and their patience will wane. Even one small deal could keep that from happening.
Coming this week
- On Tuesday, we’ll get the Case-Shiller home price index and consumer confidence.
- The jobs picture will also begin to come into focus on Tuesday, with the Job Openings and Labor Turnover Summary for March. (This is a lagging indicator). We’ll see more employment data via the ADP employment report and Bureau of Labor Statistics non-farm payrolls for April on Wednesday and Friday, respectively.
- Other data this week includes the initial reading of first-quarter gross domestic product (GDP) on Wednesday. Right now, the Atlanta Fed is predicting a decline of 2.5%.9 We’ll also get personal consumption expenditures and MBA mortgage applications that day.
- The cornucopia of data will continue on Thursday and Friday, with unemployment claims, construction spending and auto sales for April.
Index Performance Returns % | |||||
| 1 WK | YTD | 1YR | 3YRS | 5YRS | |
| S&P 500 | 4.59% | -6.06% | 9.44% | 8.75% | 14.26% |
| NASDAQ | 6.73% | -9.98% | 11.35% | 10.16% | 15.02% |
| DJIA | 2.48% | -5.71% | 5.32% | 5.62% | 11.03% |
Interest Rates: | |||||
| 4/25/2025 | 4/18/2024 | ||||
| UST 10 YR Government Bond Yield | 4.26% | 4.33% | |||
| Germany 10 YR | 2.47% | 2.46% | |||
| Japan 10 YR | 1.35% | 1.28% | |||
| 30 YR Mortgage | 6.85% | 6.86% | |||
| Oil | $63.18/ppb | $64.43/ppb | |||
| Regular Gas | $3.15/ppg | $3.16/ppg | |||
| All data as of April 25, 2025 | |||||
Sources:
1 Yahoo! Finance. “Dow Jones Industrial Average (ˆDJI).” https://finance.yahoo.com/quote/%5EDJI/. Accessed April 28, 2025.
2 NPR. April 22, 2025. “President Trump says he has ‘no intention’ to fire Federal Reserve’s Jerome Powell.” https://www.npr.org/2025/04/22/nx-s1-5369542/trump-federal-reserve-jerome-powell-tariffs. Accessed April 28, 2025.
3 João da Silva. BBC. April 23, 2025. “Trump hints at softening China tariffs and says no plan to sack Fed boss.” https://www.bbc.com/news/articles/c86jyw5jp6go. Accessed April 28, 2025.
4 Yahoo! Finance. “S&P 500 (ˆGSPC).” https://finance.yahoo.com/quote/%5EGSPC/. Accessed April 28, 2025.
5 Daniel Howley. Yahoo! Finance. April 25, 2025. “Google stock rises after it beats on earnings, raises dividend, and authorizes $70 billion in buybacks.” https://finance.yahoo.com/news/google-stock-rises-after-it-beats-on-earnings-raises-dividend-and-authorizes-70-billion-in-buybacks-192027323.html. Accessed April 28, 2025.
6 Paul Davidson. USA Today. April 16, 2025. “Powell says Fed can ‘wait for greater clarity’ on tariffs before cutting interest rates.” https://www.usatoday.com/story/money/2025/04/16/powell-fed-more-clarity-rates/83111374007/. Accessed April 28, 2025.
7 Charles C.W. Cooke. National Review. Feb. 20, 2025. “There Are Rumors Trump Is Working Up to 7D Chess.” https://www.nationalreview.com/corner/there-are-rumors-trump-is-working-up-to-7d-chess/. Accessed April 28, 2025.
8 Ryan King. New York Post. April 23, 2025. “Trump has received 18 written offers from countries on trade, won’t allow ‘rushed deals,’ top econ adviser says.” https://nypost.com/2025/04/23/us-news/trump-received-18-written-offers-from-countries-on-trade-wont-allow-rushed-deals-top-econ-adviser-says/. Accessed April 28, 2025.
9 Federal Reserve Bank of Atlanta. “GDP Now.” https://www.atlantafed.org/cqer/research/gdpnow. Accessed April 28, 2025.
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