Calling April a wild ride in the markets might be an understatement. The month began with a sharp sell-off, delivering some of the worst daily losses since the COVID era, only to rebound and recover most of those losses by month’s end. Below are the April returns for the popular benchmarks that investors track (Data provided by Y-Charts & Commonwealth Financial Network):

S&P 500 Index: -1.14%
Dow Jones Industrial Average: -3.15%
Nasdaq Composite Index: -0.02%
Russell 2000 Index: -2.39%
S&P Target Risk Moderate: +0.55%

We’ve just experienced one of the most volatile stretches in stock market history. The chart below from Sentiment Trader and S&P illustrates this vividly. It uses the Average True Range (ATR), a metric that measures daily price movement based on highs, lows, and closing values. Put simply, ATR shows how volatile a security has been over a given period. The level of five-day volatility we saw in April has occurred only four times since 1962.

Reflecting on last month’s volatility, I’m reminded of the saying, ‘sometimes the best thing to do is sit on your hands.’ April was a powerful reminder that letting fear dictate investment decisions often leads to poor outcomes. On April 3rd and 4th, markets reacted as if a global recession was imminent. Yet by month’s end, the major indices had largely recovered. If you had gone to sleep on April 1st and woken up on April 30th, you might have looked at the returns and thought, ‘just another average month in the markets.’

While stocks have recovered a significant portion of their earlier losses, we’re not necessarily in the clear just yet. There remains a possibility of further downside, including a potential retest of the April lows. That said, we believe that if meaningful progress is made on trade agreements and tariffs prove to be moderate and temporary, the market is well-positioned to trend higher over the long term.

We’re in the thick of earnings season, and so far, results have come in better than expected, especially given the ongoing uncertainty surrounding global trade. In many cases, stocks have responded positively to earnings reports, even when companies faced challenges in the prior quarter. In our view, it’s an encouraging sign when markets react favorably to less-than-stellar news. This suggests that much of the negativity may already be priced in, and the worst could be behind us.

We will continue to provide special market updates as needed as the current environment can shift very quickly.

As always, don’t hesitate to contact our team with any questions.