Introduction

Early April 2025 saw one of the sharpest stock market declines in recent decades. Over just three trading days (April 3rd, 4th, and 7th), U.S. indices lost nearly 15%. In terms of trading volume and investor involvement, it was one of the most intense drops ever recorded.

Yet the rebound came exceptionally fast: within only 17 trading days, the markets nearly returned to previous levels. For comparison: in 2020, it took 107 days for markets to recover after the pandemic crash, and over 460 days following the 2008 crisis.

The key question remains: was this a one-off correction – or a sign of deeper changes in the global economic environment?

This text comments on a specific period, the spring of 2025. For a general view of how to approach market declines, see When markets fall: what to do with a portfolio and what not to do.

Markets Are Rising, but Uncertainty Remains

Between April 7th and May 1st:

• The S&P 500 gained 17.1%
• In extended trading, it added nearly 18%
• Since April 21st, when speculation began regarding changes at the Fed, the market has climbed 10.9%
• There were eight consecutive positive sessions – the last time this happened was in August 2024

Despite this historically significant rise, it is important to note that it was largely driven by expectations – not by fundamental improvements in economic data.

Macroeconomic Context: U.S. and Eurozone in Q1 2025

United States: First GDP Decline Since 2022

According to the preliminary estimate from the U.S. Bureau of Economic Analysis (BEA), U.S. GDP fell by 0.3% in Q1 2025 – marking the first contraction since early 2022.

The main driver was a record increase in imports, leading to the worst net export figure ever recorded: -4.83%.

• Household consumption grew by only 1.21%, compared to a 2024 average of 2.1%
• Investment rose sharply by +3.6%, largely due to inventory buildup
• Government spending contributed negatively (-0.25%), mainly due to cuts in defense spending

While past contractions were often quickly offset, the current combination of geopolitical tensions and supply chain disruptions could result in a more prolonged slowdown.

Underlying Risks Persist

• U.S. data signals weakening domestic demand and a deteriorating external balance
• Fiscal policy is adding pressure to the bond market
• The rise in asset prices is not supported by corporate earnings

Oil as a Geopolitical Tool

In June, OPEC+ plans to increase oil output by 411,000 barrels per day – triple the initially announced volume.

According to Bloomberg, this is a response to internal disagreements within the alliance and an effort to strengthen ties with the U.S. ahead of the upcoming visit by the U.S. president.

This shift could significantly increase market volatility.

Summary & Recommendations

Beyond market reactions and political rhetoric, hard data is coming into play.

The U.S. recorded its first GDP decline since 2022, and key components such as household consumption and net exports show clear signs of slowing.

Meanwhile, the Eurozone performed slightly better than expected, though structural uncertainty remains – especially in Germany.

For investors, this implies several key conclusions:

• April’s rebound is not a guarantee of sustained recovery. Much of the growth was driven by sentiment rather than fundamentals.
• This is a time for strategic reassessment. Regional diversification and a shift toward more defensive sectors can enhance portfolio resilience.
• It’s not about timing the market, but about building the right strategy. A long-term horizon, high-quality assets, and disciplined execution remain the pillars of successful investing.

At Melior Invest, we continue to recommend staying calm and viewing the markets through the lens of long-term growth – not short-term emotion.

Conclusion

April’s market movements reminded us how quickly things can shift – and how swiftly expectations can overtake reality.

Today’s environment favors those who are prepared and think long-term.

Feel free to reach out if you're considering portfolio adjustments – we’re happy to discuss the details with you, either in person or online.

You’re not alone in this. Melior Invest – stability and trust.