Investment update

Weekly insight into the marketplace.

April 21 to 25, 2025

Hope for a U.S.-China trade deal lifted sentiment

North American equity markets fell on Monday, as U.S. President Donald Trump’s continued public criticism of Federal Reserve (the Fed) chair Jerome Powell made headlines. The tech-heavy Nasdaq dropped 2.55%, the broad-based Dow fell 2.48%, while the bellwether S&P 500 lost 2.36%. Rising gold prices, which have hit record levels in recent weeks as investors rotate away from U.S. assets, helped stem losses on Canada’s resource-heavy TSX, limiting its decline to 0.76% for the day. Investor sentiment improved on Tuesday, as positive corporate earnings reports rolled in, and comments by the U.S. Treasury Secretary raised optimism that a trade deal between the U.S. and China may be possible. The Wall Street benchmarks erased the previous session’s losses, each gaining over 2.50%. The TSX gained ground too, rising 1.24% on the day, led by energy, financial and base-metal stocks. The positive momentum carried through Wednesday, as the Trump administration’s rhetoric toward China continued to cool, creating a tailwind for big tech stocks with exposure to the Chinese market, including Apple, Nvidia and Tesla. The tech-heavy Nasdaq led the Wall Street benchmarks higher with a 2.50% advance, while the TSX trailed its U.S. counterparts, settling for a 0.69% return. Thursday brought a third-straight day of positive performance for the North American benchmarks, with the Nasdaq again leading the way with a 2.7% gain. The TSX rose 1.04%, putting it on the verge of returning to positive territory year-to-date. Friday was another positive day for U.S. stock markets, with the Nasdaq crossing into positive territory for the month. The TSX took a step back, losing 0.07% on the day.

Trump tempered his criticism of the Fed chair

On Monday, President Trump ratcheted up his recent calls for Fed chair Jerome Powell to cut interest-rates immediately to boost economic growth and referred to him as a “major loser” for not moving fast enough. This added to mounting investor concerns over the independence of the Fed from government interference and contributed to Monday’s heavy stock-market sell-offs. A week earlier, Trump said: “If I want [Powell] out of there, he’ll be out real fast,” which Trump’s economic advisor confirmed was being considered. Many experts believe such a move would lead to financial market chaos. However, the President’s tone shifted dramatically on Tuesday. Answering reporter questions, Trump said he has “no intention” of firing Powell and “never did.” He added: “I would like to see him be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates.” The Fed’s next interest-rate decision will be announced May 7.

Mega-tech earnings were in the spotlight

Tesla and Alphabet (Google’s parent company) kicked off corporate earnings season for the Magnificent 7 mega-cap tech stocks. Tesla released its first quarter results after markets closed on Tuesday and reported that earnings per share plummeted 40% in Q1, while revenue fell 9% to US$19.335 billion. The electric vehicle maker also scrapped its delivery growth target for 2025. During the company’s conference call to discuss the results with analysts, CEO Elon Musk announced he will be scaling back his work in the Trump administration’s Department of Governmental Efficiency (DOGE). ”Starting next month, in May, my time allocation to DOGE will drop significantly,” Musk said. “I will be allocating far more of my time to Tesla.” This news helped investors look past the disastrous quarterly results and sent the company’s stock price surging 5.4% on Wednesday. Late Thursday, Alphabet exceeded expectations, reporting Q1 profit jumped 50%, supported by search advertising sales totalling US$76.5 billion. Net income came in at US$2.81 per share, beating estimates of US$2.01. Following the report, Alphabet’s shares rose more than 6% in after-market trading.