Global markets opened the month lower but recovered to finish broadly unchanged, following President Trump’s Liberation Day tariff announcements on 2 April and a partial reversal just hours after the tariffs came into effect on 9 April. This marked the activation of what investors have come to call the Trump Put, which refers to the belief that Trump will step in to support financial markets during periods of heightened volatility. The term is inspired by the Fed Put, where central banks are expected to ease policy in response to market weakness.
There was some speculation around what prompted Trump’s swift policy pivot. We believe that rising volatility in the bond market was a key factor, with the 10-year US Treasury yield spiking after the 2 April announcements before retreating later in the month.
Elsewhere, gold rose by 5.4% as investors sought safe haven assets, while oil declined by 18.6% on the back of softer global growth expectations and increased supply from OPEC+ members.
A rapid sequence of policy announcements throughout the month saw the market narrative shift frequently, sometimes by the hour. Goldman Sachs illustrated this volatility by increasing its US recession probability to 65 percent, citing rising policy uncertainty, tighter financial conditions, and weaker business investment. However, following Trump’s 90-day pause on most new tariffs (excluding those on China), Goldman quickly revised its view, lowering the recession risk to 45 percent and reinstating its 0.5 percent US GDP growth forecast.
US-China trade tensions remained elevated, although some conciliatory signals emerged. Treasury Secretary Bessent, seen as a stabilising force within the administration, suggested a path toward de-escalation. Trump also indicated that China tariffs would be reduced, though not removed entirely, and he provided some relief on auto tariffs in response to industry feedback. Meanwhile, trade talks with Japan and India appeared constructive, while discussions with the European Union were reportedly more difficult.
In other news, concerns about Federal Reserve independence resurfaced after reports suggested President Trump had considered removing Chair Powell due to his resistance to cutting interest rates. Trump later clarified he had no intention of doing so, with media noting he was aware of the potential market turmoil such a move could trigger.
Looking Ahead
Trump’s tariffs gamble is likely to keep markets on edge in the short term as intense trade negotiations play out, particularly with China.
The outcome of these negotiations will be critical in determining the direction of markets. If tariffs remain in place for an extended period, economic data may begin to soften, likely prompting central banks to ease policy. Conversely, a timely resolution with China or within the 90-day window for other countries could support a continued market recovery.
Either way, we believe our portfolios are well positioned. The Investment Committee will continue to monitor developments closely and remains ready to act should conditions change.