The difficult month for equities began with the announcement of tariffs by President Donald Trump on April 2.  Considering economic theory and history, should the tariff scheme be implemented as proposed, the U.S., Canadian and global economy will likely fall into recession. 

What happened in the first quarter of 2025?

The most influential event affecting markets was the inauguration of President Donald Trump and his introduction of tariffs on imports into the U.S. Initially described as measures to protect American jobs and security, these tariffs have caused equity markets to reverse their recent success.

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Equity performance during the second month of 2025 was weak. None of the indexes increased, and the NASDAQ lost nearly 4 per cent of its value. Despite February’s negative results, North American equity indexes have done reasonably well year-to-date, with the NASDAQ as the only exception.

What happened in January?

Equity performance for the first month of 2025 was strong. If, over the next 11 months, the indexes continue to rise at the same pace that they rose in January, their 2025 returns could potentially outperform their 2024 returns.