Monthly Market | April 2025
- albe9408
- May 8
- 7 min read
In April 2025, the United States witnessed significant economic and political developments that influenced both domestic affairs and international relations.
On April 2, President Donald Trump announced sweeping "Liberation Day" tariffs, imposing a 10% baseline tariff on all imports. This move, intended to rectify perceived trade imbalances, led to a sharp market downturn. The Dow Jones Industrial Average plummeted over 4,000 points within two days, marking the worst performance since the COVID-19 pandemic. The market volatility was further exacerbated by retaliatory tariffs from other nations, including a 34% tariff from China. Analysts expressed concerns over potential stagflation, characterized by persistent inflation coupled with slowing economic growth, with first-quarter GDP growth estimates as low as 0.2%.
Dow Jones Industrial Average
From 29/03/2025 to 29/04/2025
The U.S. faced diplomatic challenges, particularly with Canada, following the imposition of tariffs. This led to political tensions and discussions about the future of trade relations. After 100 days in office, it seems as if Trump’s popularity has declined rapidly among US citizens. The following chart gives a comparison with other presidents after 100 days in power:
Presidential Approval Ratings
China’s factory activity contracted at the fastest pace in 16 months in April. On April 8–9, China held a significant conference focusing on its relations with neighbouring countries. The meeting emphasized the importance of surrounding nations as a crucial basis for China's development and prosperity, highlighting the need for a comprehensive diplomatic strategy. These developments underscore China's efforts to mitigate economic challenges through domestic policy adjustments and to bolster international relations amidst a complex geopolitical landscape.
A few days later Trump reversed his strategy, and a significant shift occurred in global trade dynamics when the United States announced a 90-day suspension of most new tariffs, while maintaining a 10% tariff on imports from all countries and increasing tariffs on Chinese goods to 145%. This move followed escalating trade tensions and was intended to stabilize markets and encourage negotiations.
The announcement led to a sharp rally in U.S. equities, with the Dow Jones Industrial Average surging over 2,900 points, marking its largest single-day gain since the 2008 financial crisis. European and Asian markets also experienced gains, with indices like the FTSE 100 and Nikkei 225 rising in response to the tariff suspension and improved investor sentiment. The tariff pause provided temporary relief to industries affected by the trade war, including automotive and agriculture sectors, as it reduced immediate cost pressures.
Market Performance
From 29/03/2024 to 29/04/2025
FTSE 100 Share Index | FTSE/JSE All Share J203 | NASDAQ 100 | S&P 500
Oil prices jumped by more than 5% following the trade truce, as investors anticipated increased demand and potential supply cuts from OPEC. Although the gold price had a bull run in 2025, it is also subject to sporadic declines. The volatility in commodities and resources has increased significantly and the work of active managers in this sector has become more important than ever. The graph below shows the inverse reaction of gold and Brent crude oil over the last year.
Inverse Reaction of Gold and Brent crude oil over the last year
Overall, the 90-day tariff suspension in April 2025 served as a temporary measure to ease market volatility and provide breathing room for negotiations, though it did not resolve underlying trade disputes.
South Africa
Closer to home, South Africa’s political soap opera also took a turn. The GNU saga lurches on, with more acronyms than clarity. Investors didn’t need the current domestic instability. The uncertainty is showing in risk appetite and the rand's behaviour. Coalition chaos is adding to the global malaise, as markets digest the noise and price in plot twists. The rand was shocked into submission after the April 2 announcement but clawed its way back (against the US$) over the last weeks of April to a level more in line with the average expected rate for 2025.
South African Rand vs US Dollar
The Budget passed (with a 0.5% VAT increase tabled), but barely - the fiscal framework scraped through Parliament (194–182), but the DA has taken it to court, challenging its legitimacy. Shortly before the court date, the Minister of Finance announced, after talks with the DA, that the proposed VAT hike will be scrapped and that a new budget will be formulated before the 1 May crucial date. The termination will leave a R75 billion expenditure hole in the fiscus. The court has ruled in favour of the DA and EFF. Treasury has announced a new budget will be voted on on 21 May 2025.
Both the ANC and DA have felt betrayed in the process and the GNU was on the brink of a collapse. However, both parties realise that the alternative is just too horrific to contemplate and after talks have concluded that the GNU will continue, but with more discussion around issues. The ANC is still battling to come to terms that although they have a majority, they are not the only party in the government and that the other participants need to be consulted. How successful they will be in accepting this fact needs to be seen.
South Africa’s inflation rate fell sharply to 2.7% in March 2025 from 3.2% in February and below analysts' estimates of 2.9%. This marked the lowest reading since June 2020, falling below the lower bound of the SARB's 3–6% target range, mainly due to a steeper decline in fuel prices. With slow economic growth and lower than expected inflation, the door is wide open for the SARB to cut interest rates, but the MPC might still be too afraid due to global uncertainty. Forecasts see inflation pick up to around 4.6% a year ahead.
South African Inflation Rate over the last year
As always, beneath the headlines lie the real questions – not just what happened, but what it means for portfolios in a world where the rules keep changing. One thing is clear, not all companies or countries will come out equally.
The real measure of risk in South Africa is the 20-year bond yield. Although the yield spiked at the 2 April announcement, it petered out to levels it was at before the announcements. It remains volatile and currently offers excellent rates on life annuities.
South Africa 20 Year Bond Yield
While the market reaction has been sharp and unsettling, it's critical we remember that long-term wealth creation has always required staying the course through periods of short-term disruption. Trade tensions and political noise, while loud, tend to fade in the face of enduring fundamentals, innovation, and resilience across global businesses. Reacting emotionally to market volatility often results in locking in losses and missing out on the recovery – which history has shown can come swiftly and unexpectedly. Staying invested, diversified, and focused on your long-term objectives remains the most reliable path to building and preserving wealth.
Snippets from the market
The Magnificent 7 and U.S. Small Caps (Russell 2000) are down more than 20% off recent peaks with the 2 April announcement.
Russia has dismissed the possibility of signing a long-awaited peace treaty with Japan to formally end WWII.
South Korea will hold a snap presidential election on 3 June following the impeachment of Yoon Suk Yeol.
Germany has pressed pause on the further admission of refugees via a UN programme. Migration remains a hot topic in coalition negotiations.
In his latest partial reversal of tariff policies, President Donald Trump has given car manufacturers two years to boost the percentage of domestic components in US-assembled vehicles.
Pope Francis, the leader of the Catholic Church died earlier at age 88 at his Vatican residence after having been hospitalised with pneumonia for 38 days earlier this year. He was buried in the Basilica of Santa Maria Maggiore, Rome.
President Volodymyr Zelensky cancelled part of his programme in South Africa to return to Ukraine after intense Russian missile and drone attacks on Kyiv.
South Africa and the US are to begin bilateral talks, after the Trump administration’s imposition of global tariffs. The first round of vital discussions will take place with Trade, Industry & Competition Minister Parks Tau in South Africa.
Mcebisi Jonas was appointed as the South African special envoy to the US.
South Africa’s latest employment equity targets are now in force, with companies legally required to meet specific transformation goals, or face stiff penalties. It requires employers with 50 or more employees to ensure their employment equity plans conform with the new sector-specific targets.
The National Employers’ Association of SA, and Afrikaans business organisation Sakeliga say they will combine forces to oppose the new racial hiring policies as unconstitutional, unlawful, and harmful.
The Auditor General has revealed a poor state of governance and lack of accountability at the State Information Technology Agency.
The procurement of 22 laptop computers by the Mpumalanga Department of Basic Education cost R2 million and will be investigated as a dubious transaction.
South Africa's next local government elections will be held between 2 November 2026 and 1 February 2027.
ANC secretary-general Fikile Mbalula said neither Deputy President Paul Mashatile nor the government informed the party about an alleged shooting incident involving the deputy president until the story surfaced in media reports. The ANC has launched an investigation into the matter with speculation that it is an election ploy for the next president of the ANC.
The IMF revised South Africa’s expected growth rate down to just 1% for this year, rising to 1.3% next year, and it now forecasts global growth of just 2.8% this year.
SAA has submitted a five-year, two-phase corporate turnaround plan to the government that could see it going to the market for a R2.25 billion investment facility and seeking a strategic equity partner.
Mineral & Petroleum Resources Minister Gwede Mantashe has laid out an empowerment blueprint for companies looking to explore for gas and oil in South Africa.
South Africa could face up to 65 000 additional Aids deaths and almost 300 000 extra HIV infections by 2028 if the US completely withdraws funding and the government does not step in.
Botswana Power Corporation has halted load-shedding across the country, bringing relief to businesses and homes that have endured power cuts for the past weeks due to failures of Morupule B power plant.
Energy analyst, Gawie Kanjemba, said Namibians are not ready for some of the opportunities the energy sector will provide. He said the country’s energy ambitions are the calm before the storm, adding that there will be a rush of operators looking to exploit opportunities.
South Africa's gold & foreign exchange reserves
R billion
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