The first quarter of 2025 started off as a continuation of 2024 with equities up through mid-February. However, by the end of March, the S&P 500 was more than 4.5% lower for the year, and the second quarter is certainly off to a turbulent start. One can point to the uncertainty caused by tariffs, but the realization that the U.S. isn’t the only AI game in town as well as the threat of a government shutdown and disruptions from mass layoffs in the Federal government have contributed to market volatility.
This quarter certainly has reminded us that diversification is your friend. Value stocks, while still lower for the quarter, outperformed growth stocks, but small cap stocks lagged large caps. Foreign Developed stocks were up more than 4%.
Another bright spot in the quarter was bonds – as equities zigged, bonds zagged. The Bloomberg Aggregate Bond Index was up more than 2.5% and the 10-year Treasury increased 4%, with the yield falling to 4.2%. Global bonds rose as well.
For a more detailed discussion, see the short article here. And for a deeper dive on the quarter, check this out.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.
The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, USdollar-denominated, fixed-rate taxable bond market.
