April has been a rollercoaster ride for the S&P 500 index – which is still down by more than 6% this month as of market close on Thurs
day, April 10th, 2025. Such wild moves were last seen during the Covid crash. But this time, the backdrop is different – inflated asset prices and uncertainties around tariffs have caused massive volatility upwards of 80% on an annualized basis. While the Tariff pause saw a >10% surge in the S&P 500 and NASDAQ on Wednesday – likely driven by short covering – a meaningful chunk of that gain was given up on Thursday as the market came to its senses. What can we do now?
There are certainly small pockets of value to look at as some stocks have defied the market sentiment. But if you seek upside with less volatility and want to avoid stock-specific risks, consider the High-Quality portfolio, which has outperformed the S&P 500 and achieved returns greater than 91% since inception.
What’s Causing Volatility?
- Trade policy uncertainty: Despite a temporary pause on tariffs by the Trump administration, concerns persist about the long-term implications of trade tensions on global economic growth. Markets run on confidence, and that confidence right now is low given the unpredictable nature of policy implementation
- Manufacturing slowdown: U.S. manufacturing contracted in March for the second straight month and new orders are weakest in the last 2 years
- Market sentiment: Investor sentiment remains fragile and even bond markets aren’t spared as yields rose sharply earlier this week, putting the idea of ‘US bonds as a safe investment’ in question
Stocks Defying Grim Market Sentiments
Despite the broader market decline, several stocks have demonstrated resilience in April:
- UnitedHealth Group (NYSE:UNH) and Humana (NYSE:HUM): Jumped >10% this month as the U.S. government announced it will pay more to these companies for their Medicare Advantage Plans
- Ross Stores (NASDAQ:ROST): Up >8% in April, Ross Stores looks like a decent investment as it can capitalize on value-seeking consumers as they pinched due to inflated prices that may yet see more increase if tariff negotiations turn sour
- Newmont Corporation (NYSE:NEM): Newmont has benefited from investors seeking safe-haven assets amid market uncertainty. The stock is up >5% this month so far.
- Palantir Technologies (NASDAQ:PLTR): A high-flying AI-driven data analytics firm continues to attract investors amid market mayhem despite its steep valuation.
Note: all return numbers are as of market close on Thursday, April 10th, 2025
Sector Performance
Consumer Staples was the most resilient sector, while the Energy sector plummeted the most, driven by a drop in oil prices and geopolitical tensions emerging from tariff negotiations. There is a good chance that oil and gas stocks are likely to remain the most volatile.
Still not confident about what to buy next? Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.