Monthly Market Review - April 2025
April 2025 was a month of heightened volatility in global markets, primarily driven by the U.S. administration's announcement of sweeping tariffs. This led to a sharp sell-off in financial markets, with both equities and bonds falling sharply. However, markets rebounded later in the month after the US announced a pause for negotiations, alleviating some investor concerns. The MSCI World Islamic Index dipped 0.5% in April, bringing its year-to-date (YTD) return to -3.0%, in contrast, the Dow Jones
Sukuk Index gained 0.7%, lifting its YTD return to 3.0%. Gold prices surged to new highs, with spot prices surpassing $3,500 per ounce, before easing back in the final days of April. The U.S. Dollar Index fell sharply, weighed down by trade policy uncertainty, weakening investor confidence in U.S. assets, and rising expectations of monetary easing.
In April 2025, the U.S. economy navigated a complex landscape marked by evolving trade policies and shifting economic indicators. Inflation eased to 2.4% year-on-year (YoY) in March, suggesting moderating price pressures, while the unemployment rate held steady at 4.2% in April, highlighting stability in the labor market. However, real GDP unexpectedly contracted by 0.3% in the first quarter, partially due to a spike in imports triggered by tariff anticipation, widening the trade deficit. 1 Manufacturing showed modest resilience, with the PMI rising slightly to 50.2, indicating marginal growth. Markets widely anticipate that the Federal Reserve will leave interest rates unchanged in May.
In the UK, the Consumer Prices Index (CPI) rose by 2.6% YoY in March, down from 2.8% in February. The S&P Global UK Manufacturing PMI was revised up to 45.4 in April from 44.9 in March, indicating a continued contraction in the manufacturing sector, albeit at a slightly slower pace. Export orders declined significantly, attributed to reduced demand from major trading partners, including the U.S., Europe, and China. 2
The Eurozone's annual inflation remained stable at 2.2% in April, consistent with March figures. The HCOB Eurozone Manufacturing PMI inched higher to 49.0 in April from 48.6 in March, marking its highest level in 32 months but still below the 50-mark separating growth from contraction. The ECB took a proactive stance and reduced its deposit interest rate by 25 basis points to 2.25%, marking its seventh rate cut over the past year. This decision was influenced by ongoing economic challenges,
including weak growth, and rising U.S. tariffs. 3
China's economy encountered challenges as manufacturing activity contracted, with the official Manufacturing PMI dropping to 49.0 from 50.5 in March, as export demand was affected by heightened U.S. tariffs. In response, the Chinese government introduced the Private Sector Promotion Law to bolster domestic business confidence and support private enterprises through improved legal safeguards. 4 Economic data for the first quarter revealed a 5.4% year-on-year GDP growth and a 1.2% quarter-on-quarter increase, surpassing expectations and reflecting robust domestic consumption and industrial output. 5
Looking ahead, markets are poised to remain highly reactive to geopolitical developments, trade policy shifts, and central bank actions. Investors are encouraged to maintain a diversified portfolio to manage potential volatility.
References
1 (Reuters, US economic stall hints at a freefall to come, 2025) US economic stall hints at a freefall to come. Retrieved from https://www.reuters.com/breakingviews/us-economic-stall-hints-freefall-come-2025-04-30/
2 (Times, 2025) Trump tariffs dent overseas demand for British goods. Retrieved from https://www.thetimes.com/business-money/companies/article/trump-tariffs-dent-overseas-demand-for-british-goods-gmqvl9nrf?
3 (Bank, 2025) Monetary policy decisions. Retrieved from https://www.ecb.europa.eu/press/pr/date/2025/html/ecb.mp250417~42727d0735.en.html
4 (Reuters, China adopts law to bolster private sector amid trade war, 2025) China adopts law to bolster private sector amid trade war. Retrieved from https://www.reuters.com/world/asia-pacific/china-adopts-law-bolster-private-sector-amid-trade-war-2025-04-30/
5 (Reuters, China Q1 GDP growth tops expectations, but US tariff shock looms large, 2025) China Q1 GDP growth tops expectations, but US tariff shock looms large. Retrieved from https://www.reuters.com/world/china/chinas-q1-economic-growth-likely-slow-tariffs-darkens-outlook-2025-04-15/
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As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
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