Key Points

• April’s extreme market volatility stemming from unexpectedly severe U.S. tariff policies resulted in the Nasdaq-100 Index® (NDX®)’s 4^th worst 2-day loss since 2007 on April 3^rd and 4^th, followed by the 2^nd best day since 2007 on April 9^th when a 90-day pause in reciprocal tariffs was announced for all countries except China.
• After the initial shock, many U.S. and international equities finished April nearly unchanged thanks to market sentiment shifting in the direction of anticipating more flexible, less severe long-term tariffs.    Performance across Nasdaq’s suite of indexes finished mixed for April with just over half of the indexes tracked in our report posting gains, and the average index up 0.2%. International equity markets notably outperformed US markets, continuing the YTD trend.
• Perhaps the most significant takeaway from April’s gyrations was a breakdown in the historically strong negative correlation between US equities and “safe haven” U.S. Treasuries/USD during severe market drawdowns.
• After an initial drop in sync with other assets, Nasdaq Bitcoin^TM Index (NQBTCS^TM) posted strong performance over the final three weeks of the month, making it the best performing index in April—higher by 14.1%.  In the face of a steadily weakening USD, Bitcoin seemingly acted more like the form of “digital gold” that many crypto enthusiasts have been discussing over the life of the asset.

Charts of the Month 

International equities actually finished April with higher YTD returns vs. where they began the month as Nasdaq DM Ex United States™ (NQDMXUS™) benefited from concerns around the U.S. role as a dependable, safe haven on the global stage going forward. Nasdaq Emerging Markets™ (NQEM™) gained as the broader USD trade-weighted index is -8.3% YTD—EM equities tend to outperform when the USD is weaker. Despite the sharp volatility in April, NDX and the Nasdaq-100 Mega^TM (NDXMEGA™) YTD returns were higher at the end of April vs. the beginning of the month. The Nasdaq US Small Cap™ (NQUSS™) universe did not rebound to the same degree given this cohort’s sensitivity to the domestic growth outlook as U.S. recession concerns have intensified. 

Instead of rallying to offset losses in equities, 10-year Treasuries and the USD fell in tandem initially, with the former somewhat reverting (i.e. yields falling) during the late-month recovery. A combination of factors including rapid unwinds of leveraged Treasury positions; potential outright selling of US assets by international investors; and a fundamental reassessment of the US term premium – driven by higher expected long-term inflation as well as policy uncertainty – likely contributed to the weakness seen in Treasuries and the USD.

Executive Summary

Much has already been written about the havoc wreaked upon the markets by the tariffs and trade policy (click here for a summary document).  In a webinar hosted by Nasdaq Global Indexes on April 16^th, we ran through the sequencing of the trade tariff announcements and the ensuing historic equity and cross-asset swings—so we will not rehash more of these here. Those interested in accessing a replay of the webinar should click here.  As also noted during the webinar, while heightened near-term policy uncertainties will continue to drive market volatility, NDX’s one-year forward median return following a bear market trough is 64% and following a correction trough is 38%; NDX fell by nearly -23% from the peak on February 19^th to April 8^th. Consequently, history suggests that the medium-term outlook is favorable after such drawdowns. 

As investors digest the seemingly daily cacophony of trade policy headlines, they are also closely monitoring any signals from the Federal Reserve given the increased angst around a possible U.S. recession. Economists’ probability of a recession has risen to 40% from 20% at the end of February while the Bloomberg 2025 real GDP YoY forecast has fallen to 1.4% from 2.3%. First quarter US GDP was reported with a contraction of -0.3%. As such, the markets are now pricing in nearly four Fed rate cuts in 2025, up from almost three at the end of March. However, on April 16^th, Chair Jay Powell noted that the Fed is not in a hurry to lower rates while emphasizing the need to prevent tariffs from causing higher inflation—so a tug-of-war has developed between market pricing of the Fed and the latest Fed rhetoric.

Equity volatility as measured by the CBOE Nasdaq-100 Index Volatility (VXN) hit an intraday high of 52.2 on April 9^th—its highest level since the depths of the Covid Crash on March 18, 2020. While still above its five-year average of 25, it has fallen to 27.8 as the markets await the next catalyst. Uncertainties are likely to persist in the near-term, impacting economic and corporate growth outlooks. On the corporate front, 51% of NDX companies reported Q1 2025 earnings thus far, with 78% beating EPS estimates and 73% beating their sales estimates. However, Q1 earnings results are to some extent an afterthought for the markets as investors focus on forward guidance and/or if companies are outright pulling guidance given the policy unknowns and increasingly complex global operating environment. 

Nasdaq Indexes April 2025 Performance Recap

Among the 122 indexes tracked in this report, 64 finished April in positive territory, while 58 ended with negative returns. The best-performing index was Nasdaq Bitcoin^TM (NQBTCS™), delivering a return of 14.1%.  The worst performance was from Credit Suisse Nasdaq WTI Crude Oil FLOWS106 TR^TM (QUSOITR™) which lost –14% for the month on concerns around additional supply and slowing global growth. The average return across all 122 indexes for the month was +0.2%. 

Nasdaq Featured Indexes 

8 out of the 13 Nasdaq Featured Indexes registered positive returns in April despite extreme volatility conditions brought on by the administration’s tariff announcements. The Nasdaq-100 Technology Sector™ (NDXT™) was the top performer, registering a positive return of 2.6% while the Nasdaq Innovators Completion Cap™ (NCX™) was the bottom performer, recording a decline of –1.1%. The strong recovery of several mega cap stocks helped the Nasdaq-100® (NDX®) as it was up 1.5%. The Nasdaq-100 Equal-Weighted™ (NDXE™) fared not quite as well as it was up 0.7% and snapped a string of three consecutive months of outperformance.  Nasdaq-100 ex Top 30™ (NDX70™) and Nasdaq-100 Top 30™ (NDX30™) each returned 1.5%. Overall, this group of indexes was up an average of 0.6%.

Nasdaq Global Indexes 

Performance across the Nasdaq Global Indexes suite was generally positive. Nasdaq DM Ex United States™ (NQDMXUS™) was the best performer, rising 4.4%. Nasdaq Europe™ (NQEU™) was up 4.1%. Nasdaq Emerging Markets™ (NQEM™) was also positive, registering returns of 1.4%. The group's laggard was Nasdaq US Small Cap™ (NQUSS™) with a return of –3.2%. This index came under pressure as concerns about slowing growth and a higher probability of a recession weighed on small cap names.

Nasdaq Sector-Specific Indexes

Within Nasdaq’s sector-specific indexes, PHLX Gold/Silver™ (XAU™) was the top performer, registering positive returns of 5.8%, as the spot gold price hit another all-time high due to its role as a safe-haven asset and an inflation hedge.  This was the only index with a positive return in the group. The KBW Premium Yield Equity REIT™ (KYX™) was the laggard in the group, down –7%.

Nasdaq Thematic Indexes 

Overall performance across the Nasdaq Thematic Tech lineup was positive with 21 out of the 25 indexes in the suite recording gains, averaging 2.2%. The best performing index in the group was Nasdaq CTA Global Video Games Software™ (PLAYR2™) with a return of 10.7%. Nasdaq US Smart Semiconductor™ (NQSSSE™) was the worst performer, registering a loss of -2.1% as the effects of tariffs and export restrictions on chips for national security interests weighed on several names.

Nine indexes in the Nasdaq Thematic Renewables and Energy Transition Materials suite posted gains this month, with an average return of 1.5%. The standout in the group was Nasdaq Sprott Junior Uranium Miners™ (NSURNJ™) which was up 8.6%.  Nasdaq Sprott Lithium Miners™ (NSLITP™) was the worst performer, registering a loss of -7.2%.

The Nasdaq Crypto Index suite had an average gain of 8.9%. Nasdaq Bitcoin™ (NQBTCS™) was the best performer, rising 14.1% as it moved opposite the US Dollar, which weakened vs. most of its trading partners. Nasdaq Ethereum™ (NQETHS™) was the worst performer, seeing a loss of –2.2%. 

Nasdaq Quantitative Indexes

Across the index suites comprising Nasdaq’s quantitative offerings, performance was mostly negative with 36 out of the 52 indexes seeing losses in April. The average return was -1.6%. Almost half of the indexes in the Nasdaq Options & Other Quantitative suite saw losses, and nine out of the eleven Nasdaq Multifactor indexes were negative this month.

Within the Dorsey Wright suite, Dorsey Wright Developed Markets Tech Leaders™ (DWADM™) was the best performer, gaining 8.6%.  Dorsey Wright Energy Tech Leaders™ (DWEN™) was the worst performing index at -11.6%.

12 of the 15 indexes in the Nasdaq Dividend and Income suite posted losses this month, with an average decline of –1.9%. Nasdaq International Dividend Achievers™ (DAT™) was the top performer, posting a return of 3.5%. The worst performer in the group was Nasdaq US High Equity Income™ (NQUSHEI™), down –7.5%.

Nasdaq Volatility and Risk Control Indexes 

All 13 indexes in the Nasdaq Volatility and Risk Control Index Suites registered negative returns. Overall, the average performance was a loss of –3.9%. Given losses across the board, the Indexes with the most conservative volatility control metrics fared better than indexes that controlled for higher volatility. 

The Nasdaq-100 Volatility Control 5%™ (XNDX5E™) was the most resilient performer registering a slight negative return of -1.7%, while the Nasdaq-100 Risk Control 40 4D™ (NXQR404™) was the weakest, down    -7.3%.

Disclaimer:

Nasdaq® is a registered trademark of Nasdaq, Inc. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice, either on behalf of a particular security or an overall investment strategy. Neither Nasdaq, Inc. nor any of its affiliates makes any recommendation to buy or sell any security or any representation about the financial condition of any company. Statements regarding Nasdaq-listed companies or Nasdaq proprietary indexes are not guarantees of future performance. Actual results may differ materially from those expressed or implied. Past performance is not indicative of future results. Investors should undertake their own due diligence and carefully evaluate companies before investing. ADVICE FROM A SECURITIES PROFESSIONAL IS STRONGLY ADVISED.

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