Market Data as of Week Ending: 4/11/2025 unless noted otherwise
Stock prices rebounded despite elevated levels of market volatility and shifting trade policy that continued to dominate investor sentiment. President Trump announced a 90-day pause on the reciprocal tariffs for most countries (excluding China) to allow time for negotiations. Investor sentiment pivoted back to large-caps, outperforming their small and mid-sized peers. From a style perspective, investors showed a strong preference for growth relative to value across all three size segments. Information technology was the best-performing sector, followed by strong gains from industrials and communication services. Energy and real estate were the only two sectors that were down for the week, as the price of oil changed little and defensive stocks lagged. Foreign stocks were mixed, with a small gain for developed markets. However, sentiment worsened for emerging markets, which was the worst-performing major equity asset class.
Volatility and uncertainty around global trade during the week weighed on U.S. Treasuries as yields increased across the curve. The benchmark 10-year Treasury yield increased by nearly half a percentage point, ending the week at 4.48%. It’s unclear what exactly caused the rapid increase in rates, but a combination of leveraged trades that were likely facing margin calls and some selling pressure among foreign and domestic investors weighed on prices. The 2-year Treasury yield also increased by nearly 0.3%, ending the week at 3.96%, and increased the 2-10 spread to more than 0.5%. Shorter duration bonds outperformed, and high yield was the bestperforming segment in the bond market as credit spreads narrowed. Investment-grade corporate bond yields and high-yield bond yields increased, finishing the week at 5.55% and 8.64%, respectively.
Economic data was once again mixed, with a divergence between observed and surveyed data. Fed minutes from March were released, with officials taking a “cautious approach” amid heightened uncertainty, noting downside risks to employment and economic growth and upside risks to inflation. That meant all eyes were focused on March inflation data, and the results came in better than expected, with a decline of -0.1% for the headline Consumer Price Index (CPI) and a monthly gain of only +0.1% for Core CPI (excluding food and energy). Both figures were lower than expected, bringing down headline CPI to +2.4% and Core CPI to +2.8% on a year-over-year basis. The softer-than-expected readings were largely driven by declines in airline fares, motor vehicle insurance, used vehicle prices and recreation. Results for the month of March in the Producer Price Index (PPI) also came in lower than expected, with a decline of -0.4% for the headline figure and a decline of -0.1% for the core reading. These positives were offset by inflation expectations from the University of Michigan, with inflation expectations surging to +6.7% for the next year, the highest level since 1981, and sentiment declining for the fourth consecutive month to 50.8, its lowest level since June 2022.