Market Wrap-Up: May 1, 2025

Is Recession Around the Corner?

Year-to-Date Returns (as of April 30^th , 10:45 AM, 2025)

• S&P 500: –7.2%​ Bear Market
• Nasdaq Composite: -11.17%​ Bear Market
• Dow Jones Industrial Average: -5.86%​ Correction
• S&P 500 Equally Weighted: -6.73%
• Russell 2000 (Small Cap Index): -13.16%​ Bear Market
• Gold: +22.97%​ New High

Key Economic Data This Week:

• ADP Employment Change: 62k (vs 155k Expected)
• GDP Annualized QoQ: -.3% (vs -.2% Expected)
• GDP Price Index: 3.7% (vs 3.1% Expected)
• Personal Income: 0.5% (vs 0.4% Expected)
• Personal Spending: 0.7% (vs 0.6% Expected)

Economic Outlook

The U.S. economy contracted in Q1 of 2025, with GDP declining at an annualized rate of –0.3% – marking the first negative quarter since early 2022.  A sharp rise in imports, linked to new tariffs under President Donald Trump’s second term, and escalating trade tensions, has contributed to the slowdown. 

Economists surveyed by Dow Jones had forecasted modest growth following a robust GDP increase Q4 of 2024. However, recent data prompted many on Wall Street to revise their outlooks downward, anticipating a tougher economic climate in the quarters ahead.   

Bitcoin Outpaces Traditional Assets:

Bitcoin surged +12% in April, outperforming gold and tech stocks. The cryptocurrency is increasingly viewed by investors as a potential hedge against inflation, fiscal instability, and geopolitical uncertainty.    

Conclusion:

The market continues to struggle to maintain momentum. Earnings season is in full swing, with 50 companies, including META and MSFT, reporting today, April 30^th. Expectations are high; a miss or lowered guidance from these giants could weigh heavily on broader indexes.  Diversification remains essential in navigating this landscape.  Money markets continue to yield around 4%, presenting solid opportunities for returns as we seek strategic investments. 

Have a great weekend.

Your Omnistar Investment Team