April has been an extremely turbulent month for the markets, marked by an initial steep decline followed by a gradual recovery. The S&P 500 experienced an 11.2% drop in the first eight days due to President Trump's introduction of 'reciprocal' tariffs, but later regained some of its losses after a temporary pause in most tariffs. This period of volatility also affected the Dow and Nasdaq, with the Dow on a six-day rally but still projected to end the month down 3.5%. The market turbulence, attributed to Trump's trade policies, has left investors uncertain about the potential for a recession and the long-term impacts on the economy. The bond market and the dollar also experienced significant fluctuations, highlighting the broader economic uncertainty and the potential challenges in Trump's ambitions to reshape global trade.

The S&P 500 dropped 11.2% at the start of April due to President Trump's 'reciprocal' tariffs, but later recovered to end the month down just 1%. This decline was part of a broader market volatility that also saw the Dow Jones and Nasdaq Composite experience significant fluctuations.

Trump's tariffs have caused uncertainty, leading to a volatile market response, including a sell-off in stocks, bonds, and the dollar. Investors are left wondering whether this volatility is an anomaly or a precursor to more economic turmoil.

The bond market has been particularly volatile, with the 10-year Treasury yield dipping below 4%, spiking above 4.5%, and then settling below 4.2%, testing the limits of the Trump administration's trade policy ambitions.

Despite a six-day winning streak, the Dow is expected to end the month down 3.5%, driven largely by the initial market slump caused by tariff announcements and subsequent recovery efforts.

Trump's trade policies have introduced significant uncertainty into the market, impacting consumer confidence and leading to concerns about a potential recession as the US economy contracted in the first quarter for the first time since 2022.

The Federal Reserve Bank of Atlanta forecasted a sharp decline of 2.7% for US GDP in the first quarter of 2025, marking the worst quarter since mid-2020, adding to the economic uncertainty.

Market analysts believe that the future trajectory of the markets will depend on how effectively the US markets and corporate America can act as guardrails against Trump's trade policies, which have already demonstrated a capacity to unsettle financial markets.