Executive Summary

April 2025 was one of the most volatile months experienced by global financial markets since the pandemic. The United States announced a wide-ranging system of import tariffs on 2 April, triggering sharp falls across equities, commodities and other risk assets as investors considered the possibility of a severe escalation in global trade conflict.

The initial measures included a baseline tariff on most imports and substantially higher country-specific rates for several major trading partners. China responded with retaliatory duties, leading the United States to increase tariffs on Chinese goods further. The rapid escalation created concern that global growth could weaken while inflation remained elevated.

Markets recovered dramatically after President Donald Trump announced a 90-day pause on most of the higher country-specific tariffs on 9 April. The baseline tariff remained in place, while China was excluded from the pause. The S&P 500 rose by 9.5% that day, recording one of its strongest single-session gains in modern history.

Despite the rebound, uncertainty remained exceptionally high. Companies found it difficult to forecast costs, demand, investment and supply-chain requirements when tariff rates could change rapidly through executive action or bilateral negotiation.

The S&P 500 finished April only modestly lower after experiencing extreme intra-month losses. The Dow Jones Industrial Average and smaller-company indices produced larger declines, while selected technology shares recovered as exemptions were introduced for smartphones, computers and certain electronic products.

Government-bond markets also experienced unusual volatility. US Treasury yields initially declined as investors sought defensive assets, but subsequently rose sharply amid concern about inflation, foreign demand, leveraged trading positions and confidence in US economic policy.

The European Central Bank reduced its deposit facility rate from 2.50% to 2.25%. Policymakers concluded that disinflation remained on track and that escalating trade tension had weakened the regional growth outlook.

The Federal Reserve and Bank of England did not hold monetary-policy meetings during April. Both institutions faced a more complicated outlook in which tariffs threatened to increase prices while simultaneously reducing economic activity.

Gold reached new record highs as investors sought diversification from equities, government bonds and the US dollar. Oil prices fell sharply as markets reduced expectations for global demand and anticipated additional production from OPEC+.

Key Themes During April

• The United States announced broad reciprocal tariffs on 2 April.
• Global equities suffered a rapid and severe sell-off.
• Most higher country-specific tariffs were paused for 90 days.
• The US–China trade conflict escalated substantially.
• The S&P 500 recorded a historic 9.5% one-day recovery.
• US Treasury yields experienced exceptional volatility.
• The ECB reduced its deposit rate to 2.25%.
• Gold reached new record highs.
• Oil prices declined amid weaker demand expectations.
• Private-market investors increased their focus on supply-chain and liquidity risk.

Global Economic Overview

The global outlook deteriorated during April as tariffs increased the risk of weaker trade, lower investment and higher consumer prices. The eventual economic effect remained highly uncertain because implementation dates, exemptions and negotiated outcomes continued to change.

United States

The US economy entered the tariff shock with resilient employment and household spending, but surveys showed a rapid deterioration in confidence. Businesses delayed decisions while assessing the cost of imported materials and possible retaliation.

First-quarter GDP contracted modestly on an annualised basis, although the headline figure was distorted by a surge in imports as companies brought goods into the country before tariffs took effect. Domestic consumption and investment were more resilient than the headline number suggested.

US Tariff Policy

The administration introduced a general tariff applying to most imports alongside higher rates calculated for individual trading partners. The methodology and scale of the announcement surprised markets.

Following the market sell-off, most country-specific increases were paused for 90 days to allow negotiations. The baseline duty remained, while tariffs applying to China increased sharply as both countries introduced retaliatory measures.

Selected electronic products received temporary exemptions, although officials indicated that semiconductors and technology goods could later face separate sector-specific measures.

Federal Reserve

The Federal Reserve maintained its target range at 4.25%–4.50%, with its next formal decision scheduled for May. Officials emphasised that tariffs could increase inflation while reducing growth, creating conflicting implications for monetary policy.

Markets increased expectations of future rate reductions as recession risk rose. Policymakers nevertheless remained cautious because reducing rates too quickly could allow tariff-related price pressure to affect wages and expectations.

Eurozone

The ECB reduced its three key interest rates by 25 basis points. The deposit rate fell to 2.25%, the main refinancing rate to 2.40% and the marginal lending rate to 2.65%.

European growth remained weak and highly exposed to global trade. Automobile manufacturers, machinery producers and luxury-goods businesses faced particular uncertainty concerning US demand and tariffs.

Germany

Germany's fiscal expansion provided a more constructive domestic outlook, but its export-oriented economy remained vulnerable to trade disruption. Coalition negotiations continued following the February election.

United Kingdom

The UK economy faced weaker external demand and rising domestic employment costs. Higher employer National Insurance contributions and minimum wages took effect in April.

The Bank of England did not meet during the month. Markets anticipated a May reduction as growth weakened, although tariffs and regulated-price increases created inflation risk.

China

China became the principal target of US trade escalation. Authorities responded with tariffs, export restrictions and additional support for domestic markets.

Chinese manufacturers faced reduced access to the US market, although trade could be redirected through other regions. Policymakers were expected to increase fiscal and monetary support to protect employment and domestic demand.

Japan

Japan's export-oriented economy was exposed to tariffs affecting automobiles and industrial goods. The yen strengthened during the early risk-off period, creating additional pressure for exporters.

Global Outlook

The risk of global recession increased, although the 90-day pause created time for negotiation. The eventual outcome depended upon whether tariffs were reduced through agreements or became a lasting feature of international commerce.

Equity Markets

Global equities experienced extraordinary daily movements during April. Markets initially priced a severe trade war before recovering when most higher tariff rates were paused.

United States

The S&P 500 finished the month approximately 0.8% lower, despite suffering a much larger intra-month decline. The Dow Jones Industrial Average fell by more than 3%, while mid- and small-capitalisation indices underperformed.

Companies dependent upon imports, discretionary spending or global supply chains experienced the greatest pressure. More defensive healthcare, communications and selected technology businesses proved relatively resilient.

Technology and Semiconductors

Technology shares declined sharply after the tariff announcement but recovered when smartphones, computers and certain electronic products received temporary exemptions.

Semiconductor companies remained exposed to the possibility of separate sector tariffs, export controls and higher data-centre construction costs.

Artificial-intelligence expenditure remained strong, but tariff uncertainty complicated supply chains for processors, networking equipment, cooling systems and electrical components.

Consumer Companies

Retailers and consumer-goods companies faced the challenge of deciding whether to absorb higher import costs or increase prices. Businesses with strong brands and diversified sourcing appeared better positioned.

Financials

Banks declined as recession risk increased and expectations for loan growth weakened. Market volatility supported trading revenue but threatened merger, acquisition and issuance activity.

Europe

European equities fell as the region's export-oriented companies faced potential US tariffs and weaker global demand. Automobile, luxury, industrial and technology businesses were particularly sensitive.

Lower ECB rates and German fiscal expansion provided some protection for domestically oriented sectors.

United Kingdom

UK equities declined during the initial sell-off before recovering part of their losses. Defensive multinationals and gold-related businesses performed more strongly than cyclical and consumer companies.

Japan

Japanese equities weakened because of automobile tariffs, yen appreciation and concern about global trade. Banks also faced pressure as markets reduced expectations for immediate Bank of Japan tightening.

China and Hong Kong

Chinese and Hong Kong equities were volatile but comparatively resilient after state-backed institutions increased market support. Technology and domestic consumer businesses were viewed as potential beneficiaries of additional stimulus.

Emerging Markets

Emerging markets produced mixed returns. Trade-dependent Asian economies faced pressure, while lower US yields and domestic policy support benefited selected markets.

Indicative April Performance

Fixed Income Markets

Fixed-income markets experienced unusual volatility. US Treasuries initially rallied as investors sought safety, before long-term yields rose sharply during a broader reduction in exposure to US assets.

US Treasuries

The 10-year Treasury yield fell towards 4% during the initial equity sell-off before rising to almost 4.5%. The reversal attracted considerable attention because government bonds would ordinarily strengthen during a severe risk-off event.

Possible explanations included leveraged-position liquidation, reduced foreign demand, inflation concerns and changing perceptions of US policy stability.

European Government Bonds

German Bunds benefited from weak growth expectations and the ECB rate cut. Planned German borrowing for defence and infrastructure limited gains among longer maturities.

UK Gilts

UK gilts were volatile but generally benefited from expectations of a May Bank of England reduction. Global bond movements and domestic inflation limited performance.

Japanese Government Bonds

Japanese yields declined as tariff risks reduced expectations of near-term Bank of Japan tightening.

Corporate Credit

Credit spreads widened sharply during the initial sell-off. Investment-grade debt recovered more successfully than lower-rated bonds as markets stabilised.

Private Credit

Private lenders faced a more difficult underwriting environment. Borrower forecasts required stress tests for tariffs, lower demand, currency movements and delayed refinancing.

Assets reported at stable valuations still required assessment against weaker public comparables and widening market credit spreads.

Foreign Exchange

Currency markets reflected reduced confidence in US assets, tariff retaliation and changing monetary-policy expectations.

US Dollar

The dollar weakened significantly against several major currencies despite its traditional defensive role. Investors considered whether tariffs and fiscal policy could reduce international demand for US assets.

Euro

The euro strengthened against the dollar even as the ECB reduced rates. The move reflected dollar weakness and expectations of increased German fiscal spending.

Sterling

Sterling also appreciated against the dollar. Its performance reflected broad dollar weakness rather than a substantial improvement in the UK outlook.

Japanese Yen

The yen strengthened during the initial risk-off period as carry trades were reduced. Expectations for future Bank of Japan increases subsequently weakened.

Chinese Renminbi

The renminbi came under pressure as the trade conflict escalated. Chinese authorities maintained close control of the currency to prevent destabilising capital outflows.

Commodities

Gold performed strongly, while oil and industrial commodities weakened as investors reduced expectations for global growth.

Gold

Gold reached new record highs above $3,400 per ounce during the month. Investors sought protection from trade conflict, currency volatility and concern about US financial assets.

Central-bank demand and reserve diversification remained important long-term supports.

Oil and Energy

Oil prices fell sharply as recession risk increased and OPEC+ prepared to accelerate production increases. Brent moved towards levels last observed during the pandemic recovery period.

Copper and Industrial Metals

Copper declined amid concern that tariffs would reduce manufacturing, trade and construction. Its long-term role within electricity and digital infrastructure remained unchanged.

Iron Ore

Iron ore remained constrained by weak Chinese property activity and uncertainty surrounding export manufacturing.

Agricultural Commodities

Agricultural markets were affected by possible retaliatory tariffs, particularly for products traded between the United States and China.

Digital Assets

Digital assets experienced severe early-month volatility but recovered as risk appetite stabilised and the dollar weakened.

Bitcoin

Bitcoin initially declined alongside equities before recovering strongly during the second half of April. Some investors increasingly presented the asset as an alternative to traditional currencies and sovereign debt.

The market remained too volatile to function consistently as a defensive asset, but institutional ETF participation continued to expand.

Ethereum

Ether remained weaker than Bitcoin. Competition, modest ETF demand and uncertainty surrounding network economics continued to affect performance.

Institutional Adoption

Banks and asset managers continued developing custody, tokenisation and blockchain settlement despite the volatility in unbacked tokens.

Risk Considerations

• Digital assets remained correlated with equities during the initial sell-off.
• Bitcoin's later recovery did not eliminate volatility risk.
• ETF flows remained an important source of demand.
• Regulatory policy continued to develop rapidly.
• Leverage and custody remained material risks.

Private Equity

Private-equity activity slowed as tariff volatility reduced valuation confidence, complicated financing and caused companies to reconsider earnings forecasts.

Deal Activity

Transactions requiring stable cross-border supply chains became more difficult to price. Healthcare, domestic services, software and regulated infrastructure remained comparatively defensive.

Financing

Public credit spreads widened and syndicated markets became less predictable. Private lenders could provide execution certainty but demanded greater protection for tariff-sensitive borrowers.

Supply-Chain Due Diligence

Investors examined product origin, customs classification, alternative suppliers, inventory requirements and contractual rights to pass through higher costs.

Exits

Market volatility delayed IPOs and selected sale processes. Sponsors retained trade-sale, continuation-fund and secondary alternatives where possible.

Secondaries

Secondary-market opportunities increased as public-market declines and liquidity requirements placed pressure on private-asset pricing.

CE Global Private Equity Observations

• Tariff policy materially reduced transaction visibility.
• Domestic and recurring-revenue businesses appeared more resilient.
• Supply-chain due diligence became essential.
• Exit processes required greater flexibility.
• Market dislocation could create attractive secondary opportunities.

Artificial Intelligence & Technology

Technology remained central to tariff policy because advanced hardware depended upon complex international supply chains. Temporary electronics exemptions provided relief but did not remove longer-term uncertainty.

Semiconductors

Semiconductor manufacturing involved equipment, materials and assembly across multiple jurisdictions. Tariffs and export controls threatened to increase costs and encourage further supply-chain duplication.

Cloud and Data Centres

Cloud providers continued investing in AI infrastructure, but tariffs on electrical equipment, servers and construction materials could increase project costs.

Consumer Electronics

Temporary exemptions protected smartphones, computers and selected devices from the immediate reciprocal tariffs. Separate sector measures remained possible.

Enterprise AI

Businesses continued adopting lower-cost AI systems, although economic uncertainty could delay discretionary technology projects.

Technology Risks

• Tariff exemptions could be temporary.
• Supply-chain duplication could increase capital requirements.
• Export controls could restrict international sales.
• Economic weakness could delay enterprise spending.
• Rapid policy changes reduced forecasting reliability.

Sector Spotlight

Supply-Chain Resilience and Trade Compliance

April's sector spotlight examines the services and technology required to manage tariffs, customs rules and global supply-chain disruption.

Trade-Compliance Technology

Businesses required systems capable of identifying product classifications, origin rules, applicable duties and regulatory restrictions across multiple jurisdictions.

Supply-Chain Visibility

Companies sought improved information concerning suppliers, transport routes, inventory and geopolitical concentration. Real-time visibility allowed businesses to respond more rapidly to policy changes.

Customs and Logistics

Customs brokers, freight forwarders and specialist advisers experienced increased demand as businesses attempted to interpret new measures and qualify for exemptions.

Manufacturing Diversification

Companies accelerated efforts to establish suppliers across multiple countries. Reshoring and nearshoring created opportunities for industrial property, automation and contract manufacturing.

Private-Market Opportunities

• Customs and trade-compliance software
• Supply-chain analytics
• Freight and customs brokerage
• Warehouse automation
• Contract manufacturing
• Inventory-financing solutions

Investment Perspective

Trade fragmentation increased the value of technology and services that helped businesses adapt. The strongest providers combined regulatory expertise, proprietary data and integration with essential customer systems.

Regulatory Update

Trade and customs policy dominated the regulatory environment during April. Businesses faced rapid changes in tariff rates, exemptions and implementation dates.

US Reciprocal Tariffs

Companies needed to identify the country of origin rather than merely the shipping location of imported goods. Incorrect classification could create penalties and unexpected liabilities.

US–China Measures

The escalation included tariffs, export controls and restrictions affecting strategic materials. Businesses required scenario planning for further retaliation.

Electronics Exemptions

Temporary exclusions for selected electronics reduced immediate costs but did not guarantee long-term protection from semiconductor or national-security tariffs.

Financial Stability

Bond-market volatility increased regulatory attention on leverage, hedge-fund positioning and liquidity within government-debt markets.

Private Markets

Managers needed to update valuations and forecasts to reflect tariff exposure, weaker comparables and changing credit conditions.

Compliance Priorities

• Confirm customs classifications and country-of-origin data.
• Review contractual responsibility for tariffs.
• Model retaliation and exemption scenarios.
• Assess leverage and collateral exposure.
• Update private valuations and earnings forecasts.
• Strengthen supply-chain documentation and audit trails.

Looking Ahead

Markets entered May focused on trade negotiations, the Federal Reserve, the Bank of England and evidence of whether tariff uncertainty was affecting employment and inflation.

Trade Negotiations

Investors would assess whether the 90-day pause produced bilateral agreements. Progress could support markets, while renewed escalation would revive recession concerns.

Federal Reserve

The Federal Reserve was expected to hold rates at its May meeting. Policymakers would seek clearer evidence concerning the effect of tariffs on inflation and growth.

Bank of England

The Bank of England was widely expected to reduce Bank Rate. Updated forecasts would incorporate tariffs, weak growth and higher domestic employment costs.

European Central Bank

The ECB remained positioned to continue easing as trade uncertainty affected regional activity.

Corporate Earnings

Companies would provide initial estimates of tariff costs, inventory changes and demand disruption. Guidance could remain limited because policy was still changing.

China

China was expected to increase support for domestic demand and affected exporters. Currency policy and negotiations with the United States would remain central.

Private Markets

Transaction activity could remain subdued until financing and earnings visibility improved. Market dislocation might nevertheless create opportunities in secondaries, credit and corporate carve-outs.

CE Global Private Equity Perspective

April demonstrated how rapidly policy announcements could alter valuations, financing and corporate strategy. Investors required scenario analysis rather than a single fixed tariff assumption.

Businesses with domestic revenue, diversified suppliers, recurring demand and strong pricing power appeared best positioned. Highly leveraged import-dependent companies required greater caution.

CE Global Private Equity believes that opportunities remain across trade-compliance technology, supply-chain services, healthcare, domestic infrastructure and efficient software. Volatility may also create attractive secondary and structured-capital investments.

Liquidity, conservative leverage and flexible sourcing remain essential while trade negotiations continue.

This market review is provided for general information and discussion purposes only. It does not constitute investment, legal, tax or other professional advice, nor an offer or solicitation to purchase or sell any security, financial instrument or investment product. Market values can rise or fall, and past performance is not a reliable indicator of future results.