U.S. stocks ended April on a mixed note as investors absorbed signs of economic contraction and ongoing uncertainty over tariffs. The S&P 500 inched up 0.15%, the Nasdaq Composite dipped by 0.86%, and the Dow Jones Industrial Average added 141 points.

According to the U.S. Commerce Department, the economy contracted for the first time since 2022, with gross domestic product (GDP) falling by 0.3% on an annualised basis in Q1 2025. This marked a sharp reversal from the 2.4% growth recorded in the previous quarter.

Surge in Imports and Slowing Consumer Spending Drag Growth

Economists attributed the contraction to a 41% increase in imports, driven by businesses stockpiling goods ahead of new tariffs imposed by President Trump. Consumer spending also slumped, posting its weakest pace in over a year. Additionally, government expenditures fell across multiple sectors, further weakening GDP.

Market Volatility Returns as Tariff Confusion Grows

Markets had rallied earlier in April when Trump temporarily paused specific tariffs and hinted at new trade deals with countries like India. However, investor optimism faded quickly following the release of disappointing economic data and rising concerns about inflation.

The volatility followed Trump’s April 2 announcement of “reciprocal” tariffs, which at one point sent the S&P 500 down by more than 11%. While the market clawed back some gains by month-end, analysts remained cautious about further instability.

Trump Shifts Blame to Biden Over Weak Market Performance

On Truth Social, Trump distanced himself from the economic slide, declaring, “This is Biden’s Stock Market, not Trump’s,” and blaming a so-called “Biden Overhang” for the poor numbers. He urged Americans to remain patient, stating that his economic policies need more time to yield results.

Despite those reassurances, the stock market during Trump’s second term has experienced one of the weakest performances for a president’s first 100 days in modern times.

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Experts Point to Uncertainty Around Tariffs

Analysts continue to cite policy unpredictability as a core issue. “This is very clearly brought on by the uncertainty surrounding the tariffs, period,” said Kelly Bouchillon, managing director at Sound View Wealth Advisors.

Several major corporations also slashed forecasts due to the tariff fallout. First Solar and GE HealthCare both downgraded their outlooks, while Nvidia stock slipped in response to weak results from partner Super Micro Computer.

Looking Ahead

With inflation still elevated and policy direction unclear, investors remain wary heading into May. Whether Trump’s approach to trade will stabilize markets or deepen economic turbulence remains a critical question as the administration navigates its next moves.

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