Weekly Market Update - 14/04/2025

The week started off rough. U.S. stock markets, including the S&P 500, were down more than 12% following a flurry of tariff announcements from President Trump the week before. The mood was tense. Analysts began whispering about bear market territory - the world was not looking a positive place!

But then came April 9th—a dramatic bounce. The S&P 500 surged 9.5% in a single day, its largest one-day gain since the 2008 financial crisis. The Nasdaq 100 was up even more, climbing 12%. The catalyst? A 90-day pause in tariffs for countries that have not retaliated against the U.S., effectively narrowing the trade dispute to the U.S. and China.  A much more calculated approach - which in hindsight - would of been a sensible place to start!

By Friday, markets had regained their footing, with all major U.S. indices booking their best week since 2023. Despite a shaky start and mixed messages from the media, the overall market picture brightened.

This pattern—sharp declines followed by rapid recoveries—isn’t new. Markets react emotionally to uncertainty, but they also respond to opportunity and clarity. This is why staying invested is so critical.

Missing just a few of these big up days can significantly reduce your long-term returns.

Bond markets didn’t escape the turbulence either. Yields spiked sharply, which means bond prices fell. A big part of this was due to global moves, like possible selling of U.S. Treasuries by countries like China or Japan and the unwinding of “basis trades.”

It’s important to understand that bond prices and interest rates move in opposite directions. When interest rates go up, the value of existing bonds tends to fall. This is because newer bonds issued at higher rates are more attractive to investors than older bonds with lower rates, which leads to a drop in the price of the latter. This inverse relationship is a key dynamic in fixed income investing, especially when interest rate expectations are shifting rapidly.

At Hoxton Wealth, we’ve been proactively managing this risk. We’ve adjusted our bond duration to account for higher yields and are closely monitoring developments. Bonds remain a key part of a well-balanced portfolio, especially for those nearing retirement. We continue to use short-duration bonds and high-quality fixed income to provide stability.

Gold has done exactly what we expected. It rallied to record highs, touching nearly $3,200 an ounce. Investors flocked to it as a safe haven while the U.S. dollar weakened and global uncertainty rose.

Gold helps smooth the ride during periods of market stress, offering diversification benefits that help protect portfolios. We wrote about this in detail in our previous update, "Managing Through Tariff Market Madness", where we explained why gold plays a central role in turbulent times and how are funds have a large exposure to this asset class.

Oil had a rough ride this week too. Prices fell sharply midweek due to worries about global demand, largely tied to the ongoing trade tensions between the U.S. and China. Though prices recovered slightly by Friday, oil ended lower for a second week.

Interestingly, Bitcoin and the broader crypto market remained surprisingly stable. Bitcoin ended the week trading above $83,000, supported by continued institutional interest and a weakening U.S. dollar. Crypto remains volatile, but in this moment, it served as another example of diversification paying off.

As you know, Bitcoin is not something that we invest in, but it is an asset class a lot of people are interested in so its important that you are kept up to date as to what is going on with it!

The headlines this week were dramatic. Initially, news broke that there might be a 90-day pause on tariffs. Then it was called fake news. Then it became official.  All we needed was a sex scandal in there to make it even crazier! 

The market surged, then dipped, then steadied. Meanwhile, rising bond yields added to the stress, especially because they impact everyone, not just investors. Most Americans may not be directly invested in the stock market—only around 50% of the population holds investments—but 100% of the population is affected by interest rates.

Rising bond yields mean higher borrowing costs across the board: mortgages become more expensive, credit card debt accrues interest faster, and personal loans become harder to service. For a population that holds a significant amount of personal debt, particularly among the working and middle class, this can have a deep and immediate financial impact.

Politically, it’s a major challenge too. An increase in borrowing costs can hurt household budgets, slow consumer spending, and create dissatisfaction with the administration in power. In short, rising yields don’t just move markets—they affect livelihoods, elections, and economic sentiment more broadly.

We discussed this further in our commentary and my appearance on the BBC, where he spoke about why staying calm and focused is crucial during times like this. Markets go through phases, and volatility is simply the price of admission when investing in equities.

Through it all, our approach has stayed consistent.

• Global diversification helped soften the blow. While the U.S. was hit hard early in the week, other markets fared better, and everything bounced back by Friday (although not all of the way).
• Gold allocations continued to shine, offsetting weakness in other areas.
• Bond management has been crucial. We’ve adjusted durations and actively monitored credit quality to help navigate the rising rate environment.

This is why we diversify. This is why we plan. This is exactly why we hold the HCM Moderate and Adventurous funds within your portfolio, 

We get it. Watching your portfolio bounce up and down is stressful. It’s natural to feel anxious and want to act. But emotional decisions rarely serve investors well.

It’s easy for us to say, "stay calm," but we understand that’s not always easy. This is why having a team like Hoxton Wealth behind you matters. We’re watching the markets every day so you don’t have to and we will of course help you make changes when we feel the need to.

Even if tariffs stay in place, the global economy will adjust. Companies adapt. Markets find their footing. We’ve seen it with inflation scares, geopolitical crises, and even during the 2020 pandemic.

Zooming out helps. Most of our clients are long-term investors with retirement goals 5, 10, or even 20 years away. For those who are closer to retirement, we manage cash flow needs carefully—often drawing first from the more stable parts of your portfolio like bonds or cash-equivalent assets.

Markets move. They always have, and always will. But successful investing isn’t about reacting to headlines. It’s about having a plan, sticking to it, and staying disciplined through the noise.

Your plan is built for moments like this. If you’re feeling uncertain, reach out to us. Talk to your adviser. We’re here to walk you through the strategy, answer your questions, and reassure you that the plan is working.

If you can’t reach your adviser or want immediate support, our client services team is ready to help. Just drop us an email at client.services@hoxtonwealth.com and we’ll schedule a call, Teams chat, or whatever works best for you.

We don’t know exactly what the next few weeks will hold. There will likely be more headlines, more tariff talk, more speculation. But what we do know is this: staying invested, staying diversified, and staying focused on the long term continues to be the best approach.

If you’d like to read more about how we think through periods like this, we encourage you to explore:

• "Managing Through Tariff Market Madness"
• "Tariffs, Volatility, and Opportunity"
• Chris Ball’s BBC Feature on Staying Calm

Times like this test every investor’s patience. But they also reveal the strength of a disciplined approach. You’ve got a plan. You’ve got a team. And you’ve got history on your side.

The most important thing you can do right now is stay the course. That’s what we’re doing. That’s what works. And that’s what we’ll continue to do—together.