Equities Take a Hit Amid Trade War Fears
Here is the weekly market recap for this week, stocks opened the week with modest gains on March 31 as hopes lingered for easing trade tensions. But that optimism quickly unraveled after President Trump unveiled sweeping new tariffs on April 2, sparking a sharp global sell-off.
The impact was immediate and severe: on April 3, the S&P 500 plunged 4.84%, the Nasdaq dropped 5.41%, and the Dow fell 3.98%, with tech giants like Apple (-9.2%) and Nvidia (-7.8%) leading the decline. Selling accelerated on April 4, as the S&P shed another 5.97%, wiping out over 320 points in a single day amid growing fears of a recession.
The pain wasn’t limited to the U.S.—European markets mirrored the downturn, with Germany’s DAX down 3.0% and France’s CAC 40 losing 3.3% on April 3. Asia followed suit, with Japan’s Nikkei tumbling 8.7% by the end of the week.
Volatility Surges as Uncertainty Peaks
Volatility began to rise early in the week but exploded after the April 2 tariff announcement. The VIX jumped to 45.31 (+50.93%) on April 4—its highest level since the early days of the COVID-19 pandemic.
Meanwhile, VIX1D, which tracks one-day volatility, spiked to 81.89 (+142.06%), reflecting extreme short-term anxiety in the markets. The elevated volatility persisted through Friday, underscoring the heightened uncertainty investors now face.
Crypto Takes a Hit Alongside Traditional Markets
Cryptocurrencies saw a rollercoaster week. Bitcoin started strong, inching up to $83,272 on March 31, before reversing course and falling to $75,699 (-3.43%) by April 4.
Ethereum and XRP posted sharper declines, closing the week at $1,506 (-4.64%) and down 11.70%, respectively. Crypto-related equities also traded mixed, mirroring broader market jitters.
Bond Yields Tumble on Flight to Safety
Bond markets held steady early in the week but surged midweek as investors fled riskier assets. The yield on the U.S. 2-year Treasury dropped 22 basis points to finish at 3.64%, reflecting rising expectations for Fed rate cuts.
Japanese bonds saw similar action, with yields falling sharply on recession concerns, as global demand for safe-haven assets intensified.
Commodities See Mixed Action
Commodities initially appeared resilient but weren’t immune to the broader market turmoil. Copper experienced dramatic swings, briefly sliding 7% as recession fears mounted.
WTI crude dropped sharply below $60/barrel before regaining some ground. Gold remained firm around $3,100, buoyed by safe-haven flows, while silver saw sharp losses that erased its year-to-date gains.
Currency Markets Whipsawed by Trade Tensions
The currency markets were turbulent all week. Safe-haven currencies like the Swiss franc (CHF) and Japanese yen (JPY) strengthened noticeably, with USDJPY dipping below 145.00 on April 4.
In contrast, pro-cyclical currencies such as the Australian dollar (AUD) and Canadian dollar (CAD) fell sharply before staging a modest recovery as the week closed.
What to Watch: April 7–11, 2025
Markets now turn their attention to a critical week filled with economic data and geopolitical risk:
- U.S. and China tariffs are set to take effect on April 9 and 10, escalating fears of a prolonged trade conflict.
- U.S. CPI data for March, due April 10, could signal whether inflation is heating up amid tariff shocks.
- FOMC meeting minutes (April 9) will offer clues on the Fed’s stance regarding interest rates and inflation.
- Earnings season begins April 11, with major banks like JPMorgan Chase, Wells Fargo, and BlackRockreporting—key bellwethers for market sentiment.
- Consumer credit (April 7) and consumer sentiment (April 11) reports will help gauge household resilience.
- Other key releases include the Producer Price Index and weekly jobless claims on April 10 and 11.
With so many moving parts, the week ahead could set the tone for the next leg of market direction.
