Monthly Observations - May 2025

By Chris Zaccarelli

Monthly Observations

The S&P 500 fell -4.3% in April, continuing the losses from March. The MSCI All Country World index also fell -3.5% in April, reducing its year-to-date return to -3.2%. The Bloomberg BarCap U.S. Aggregate Bond index rose 0.4% during April, which increased its year-to-date gain to 2.6%.

April was a turbulent month for markets as President Trump announced sweeping tariffs on April 2nd (Liberation Day) that were larger than expected. The stock market fell sharply in response, with the S&P 500 falling 10% in the two days following the announcement. However, markets recovered much of their losses after Trump paused the tariffs for 90 days for most countries (though he increased tariffs on China to 145%).

Monthly Highlights

Liberation Day tariffs shocked markets and caused a sharp selloff

A 90-day pause on tariffs provided relief and markets recovered

China tariffs were increased dramatically and remain a risk

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article.

Trump's Liberation Day Tariffs Shock Global Markets

President Trump announced sweeping tariffs on April 2nd, dubbed Liberation Day, that were larger than expected and applied to virtually every country in the world. The stock market fell 10% in the following two days as investors worried about the impact on the global economy and corporate profits.

Trump Pauses Most Tariffs for 90 Days, Markets Rally

Just days after the Liberation Day tariff announcement, President Trump announced a 90-day pause on the new tariffs for most countries (excluding China), citing the fact that many countries had approached the US to negotiate trade deals. The stock market rallied sharply on the news, recovering much of the losses from the previous few days.

US-China Trade War Intensifies as Tariffs Hit 145%

While most countries got a 90-day reprieve from the Liberation Day tariffs, China did not. Instead, the US increased tariffs on Chinese goods to 145%, and China retaliated with 125% tariffs on US goods. The two countries are in a full-blown trade war with tariffs at levels not seen since the 1930s.

Lost Dog Travels 60 Miles to Reunite with Former Owner

A dog named Cleo traveled 60 miles on her own to reunite with her former owner after being rehomed. Cleo had been given to a new family, but apparently missed her original owner so much that she embarked on a remarkable journey to find her way back. The story has captivated animal lovers around the world and has raised questions about the emotional lives of dogs.

DISCLOSURES

Securities offered through LPL Financial, Member FINRA/SIPC. Blackbridge Financial is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non-financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.

MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage-backed and asset-backed securities.

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