April was a wild ride for global markets, but as the dust begins to settle, there are growing signs of optimism. After the S&P 500 dropped 15% in the wake of President Trump’s initial sweeping tariff announcement, a sharp 10% rebound followed quickly on the news of a 90-day pause on most tariffs. Since then, the market has responded to each new social media post from President Trump with heightened sensitivity. The S&P 500 has nearly recovered to its April 2 "Liberation Day" level, showing that investors still have confidence in the broader economic outlook.
While the road has been volatile, momentum appears to be shifting in a more constructive direction. President Trump has started to roll back some of the more extreme tariff measures and seems increasingly motivated to finalize trade agreements. Sources close to the administration suggest that both slipping poll numbers and mounting pressure from key business leaders—including CEOs of major U.S. corporations—have played a role in softening the White House’s stance. A number of high-profile CEOs have visited the White House in recent weeks, warning of the risks to corporate earnings, global supply chains and a potentially crippling recession. Their concerns appear to be resonating, leading to a more measured approach from the administration. The administration is now moving with more urgency to negotiate new trade deals, including efforts with allies like the UK, South Korea, and Japan.
Despite the U.S. entering a technical recession in Q1 2025, with GDP falling by 0.3% on an annualized basis, the underlying data suggests this may be more of a temporary distortion than the start of a prolonged downturn. Much of the weakness came from a surge in imports as companies rushed to front-load inventory ahead of potential tariff hikes. With that shock absorbed, economic indicators such as steady unemployment, stable corporate earnings in Q1, and continued consumer resilience hint at a potentially quicker rebound.
However, some risks remain—especially around potential sector-specific tariffs on semiconductors and pharmaceuticals. Meanwhile, U.S. ports are starting to empty out which bear some similarities during from the COVID era. If the current trade was with China stretches for a longer period of time, there will be significant damages inflicted on both the U.S. and China economies. Trade negotiations are still ongoing, and the tone from Washington has grown less combative.
Over in China, the government has stepped up its support measures. The central bank cut key policy rates and reduced the reserve requirement ratio to inject liquidity into the system. Additional fiscal measures—including infrastructure investment and expanded credit access for small exporters—are designed to cushion the economy from external shocks and maintain stability during this uncertain period.
In another sign of improvement, the U.S. dollar, which fell sharply in April, has begun to stabilize in recent weeks. This reflects growing investor confidence that trade deals are on the horizon and the worst-case tariff scenarios may be off the table.
The Federal Reserve has held its ground on interest rates, choosing to wait for clearer data before making any moves. While some had hoped for a rate cut in response to the negative GDP print, Fed Chair Jerome Powell emphasized the importance of avoiding a premature policy shift.
The recent trade agreement with the UK—though it preserves a 10% base tariff—provides a template for other negotiations and shows that compromise is possible. While uncertainties haven’t disappeared, the outlook is looking far more balanced than it did just a few weeks ago.
With global markets adapting to the new environment and trade diplomacy gaining traction, we may be entering a phase where opportunity re-emerges. For long-term investors, the path forward, while still choppy, is beginning to clear.
Portfolio Returns & Strategy
The portfolio held up remarkably well as compared to S&P500 which fell 4% during the month of April. The portfolio lost -2.28% (Cash), -1.22%(CPF-OA), -2.03% (SRS) with technology stock striking a hard rebound thanks to the exemption of tariffs for Apple related products, with finance, India and gold delivering a positive return. The worst performing sector is the energy sector.
I expect the market to be more positive going forward as the trade deals start to stream in with particular importance place on the China, EU, Japan and India trade deals as these are the deals that are expected to be the most positive for the financial markets. Trump is also pressured to deliver some positive news as the clock ticks down to a potential major trade war recession and he needs to act fast if he wants to cement his legacy as the "greatest U.S. president".
The portfolio is positioned to benefit from these potential tailwinds, and I remain vigilant, ready to make tactical shifts should the unpredictability of the Trump presidency once again unsettle the markets.
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